Coronavirus Will Shrink U.S Home Prices By 2-3% Nationally, But Deeper Dive Could Be In Store
Home prices will fall 2-3% this year, according to Zillow
As a comparison, home prices dropped just more than 27% nationally during the Great Recession, from their peak in 2006 to the trough in 2012, according to the S&P Case-Shiller Indices.
Zillow predicts a very fast 50-60% decline in home sales, which would bottom by the end of the spring and recover at a pace of about 10% each month through 2021.
Home prices have only fallen nationally once since the Great Depression, and that was following the subprime mortgage crisis and the Great Recession. Now, barely eight years after hitting bottom, and after a mighty recovery, prices are predicted to fall nationally again, down 2-3% this year, according to Zillow.
The real estate listing company notes that it is basing its forecast on proprietary data and a baseline prediction of a 4.9% decrease in U.S. GDP in 2020 and a subsequent 5.7% increase in 2021.
It also predicts a very fast 50-60% decline in home sales, which would bottom by the end of this spring and recover at a pace of about 10% each month through 2021.
“Housing fundamentals are strong -- much more so than they were leading into the Great Recession -- and that bodes well for housing in general,” said Svenja Gudell, Zillow’s chief economist. “Despite the difficulties, we’re seeing several signs that there is still a good amount of demand for housing, and buyers, sellers and agents are growing more comfortable moving transactions forward where possible.”