Washington (awp / afp) – Is the real estate boom caused by the pandemic in the United States over? The sharp rise in prices combined with the low stock of available goods and the shortage of lumber have disrupted the market, causing home sales to decline in recent months.
The normalization of daily life after more than a year of the pandemic could also moderate the frenzy of real estate purchases.
Last month, sales of second-hand homes fell for the fourth consecutive month, while sales of new homes fell for the second time in a row.
“The exponential phase of the real estate recovery was brief and frantic but it is now over,” said Ian Shepherdson, chief economist at Pantheon Macroeconomics on Wednesday after the publication of new home sales by the US Department of Commerce.
Last year, the spread of the new coronavirus had generalized teleworking. And the drop in interest rates to near zero had convinced Americans that now was the time to buy bigger, outside of urban centers, so houses had sold like small ones. breads.
Sales of second-hand homes had even reached their highest level since 2006, just before the bursting of the real estate bubble that led to the financial crisis of 2007-2009.
But since the spring, “the demand (for houses) in the suburbs has fallen as the fear of Covid has faded,” notes Ian Shepherdson. “The stocks (of available goods) remain low but are increasing rapidly”.
At the end of May, the number of new homes available for sale stood at 330,000, representing 5.1 months at the current rate of sales compared to 3.6 months in January.
According to the economist, the decline is expected to continue “with a probability that sales will soon return to a level below the pre-Covid trend”.
Because if the supply constraints seem to be receding, the vertiginous rise in prices is starting to dissuade some buyers.
“Lassitude” of buyers
“There is a bit of weariness and exhaustion among buyers who are fed up with bidding wars and have no protection from their offer,” observes Dana Scanlon, real estate agent in the Washington area, the federal capital.
She says some buyers may have offered up to $ 200,000 more than the seller’s initial offer.
“Buyers see that the prices are already high enough and they are no longer willing to bid more and more,” says Ms. Scanlon.
For now, homes continue to receive multiple offers and low mortgage rates are supporting demand.
But the market seems to be stabilizing.
The National Federation of American Realtors (NAR) released sales of older homes for the month of May on Tuesday.
These “are now approaching pre-pandemic activity,” commented Lawrence Yun, chief economist of the NAR.
In the new real estate market, in addition to prices, many home builders had been forced to suspend or even cancel certain projects due to the shortage of lumber used in construction.
Labor shortage
This shortage had driven up house prices, reduced margins for construction companies, and lengthened delivery times.
Wood prices have started to descend, however, which should ease some of the supply chain pressures that builders were facing and allow them to resume operations.
Like many sectors in the United States, builders are finally having to face labor shortages, slowing down construction and therefore sales.
Robert Dietz, chief economist of the National Federation of Home Builders (NAHB) said Wednesday that “some 20% of builders have limited their sales activities in recent months” to deal with either material shortages or shortages of workforce further blurring the lines on how the market will evolve.
afp/rp
–
