The last time a housing bubble popped in the United States, it took four years to play out. But things are moving fast during this pandemic — just look at the record-breaking action in the stock market — and if Wolf Richter has it right, pent-up supply could soon ravage home prices.
He used this chart to show how the typically red-hot Bay Area housing market, including Marin, Sonoma, Napa and Solano counties, has been grinding to a halt.
“This is supposed to be the spring selling season, and new listings are supposed to surge,” Richter explained in a post. “But sellers aren’t interested in having potentially infected people traipsing through their home; and they know that buyers are woefully absent, and it doesn’t make that much sense to list the home because previously listed homes are still languishing on the market.”
Here’s a chart of what the trend typically looks like vs. the current reality:
According to Thomas Stone, a Sonoma Country realtor quoted on the Wolf Street blog, there’s a very rough road ahead in the housing sector due to falling appraisals, a trickier loan market and a glut of vacation rentals that owners need to shed.
“The next big shoe to drop will be when appraisers call a declining market, probably in August but perhaps as early as July,” he said. “And this…
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