As the pandemic has forced people to spend more time in their homes, it's also made it much more difficult to find a new house if you wanted to move.
Both nationwide and in the Sacramento area, housing inventories are down significantly.
“The number of homes on the market nationwide is down 25% from this time last year,” Zillow economist Jeff Tucker told CapRadio’s Insight. “The housing market shouldn’t move that much, so we keep double checking our math because that is a staggering drop in the pool of homes for sale.”
Tucker said both buyers and sellers pumped the breaks in March and April, but buyers have come back in a big way, while sellers have been slower to return, putting an upward pressure on prices.
Tucker said a lot of millennials — people in their early 30s — are buying their first homes right now, while extremely low mortgage rates — below 3% — are available.
“Our pace of sales is actually up a little bit from this time last year,” he said.
He said in California, the Sacramento housing market is hotter than the Bay Area, with Sacramento inventory down a “staggering” 30% year over year.
“That suggests to me that in the near term Sacramento is going to continue feeling a lot of pressure on the listings that are on the market,” Tucker said.
Sacramento broker associate Erin Stumpf, with Coldwell Banker, agrees.
"In June we had about 1,300 active listings, and in June of last year we had almost double that," she said.
Stumpf said she’s seeing multiple offers on available listings, and buyers having to offer more or give up some of their contingencies to be competitive.
“Sellers right now, unless they have a flawed property or really try to push the envelope on price, definitely have an upper-hand position,” she said.
Stumpf notes that it’s difficult to put a house on the market right now, with the pandemic creating more barriers to moving through the selling process.
Realtors can’t hold open houses. Instead, a potential buyer must sign a health declaration that they are virus-free, make a viewing appointment and wear protective gear to see a home. Things like appraisals and repairs are also more difficult to schedule.
However, she said it’s a better situation now than in the early days of the pandemic when “for a good three-week period our transactions were dead in the water.”
For renters, the pandemic has made affording California’s expensive housing even more difficult than usual.
Public Advocates housing expert Michelle Pariset says as millions of people have lost their jobs, her firm is seeing many people struggling financially. She says it’s a crisis for both tenants and landlords, and solutions are needed to keep everybody’s heads above water.
“It’s not an easy task, and it’s not going to be cheap,” she said. “This moment that we’re in calls for creative solutions — things we haven’t considered before.”
Pariset highlighted two emergency COVID-19 bills — AB 1436 which offers tenant protections and SB 1410 which provides tax credits for landlords — as including aspects of what’s needed to help combat the crisis.
She says there’s a compressed time frame to put protections in place before unemployment benefits expire — including an additional $600 in federal benefits ending July 31 — and more people become unable to pay rent. While Pariset says in the best of times it can be difficult for regular people to engage at the Capitol, she urges residents to reach out to legislators and explain how important this issue is.
“We have an opportunity to deal with this crisis proactively rather than wait until there’s a huge amount of damage done further down the road,” she said.
CapRadio provides a trusted source of news because of you. As a nonprofit organization, donations from people like you sustain the journalism that allows us to discover stories that are important to our audience. If you believe in what we do and support our mission, please donate today.