The price of any item is determined by supply and demand. In residential real estate, the measurement used to decipher that ratio is called months supply of inventory.
A normal market would have 6-7 months of inventory.
Anything over seven months would be considered a buyers’ market, with downward pressure on prices. Anything under six months would indicate a sellers’ market, which would put upward pressure on prices.
Going into March of this year, the supply was at three months – a strong seller’s market. While buyer demand has decreased dramatically during the pandemic, the number of homes on the market has also decreased. The recently released Existing Home Sales Report from the National Association of Realtors (NAR) revealed we currently have 3.4 months of inventory. This means homes should maintain their value during the pandemic.
Even though the economy has been placed on pause, it appears home prices will remain steady throughout the pandemic.