The U.S real estate sector has come under immense pressure as the U.S economy faces its most significant contraction in recent years owing to the COVID-19 shocks. With more than 20 million Americans rendered jobless due to businesses’ shutdown and other economic activities, buying homes is no longer a priority. Millions of people are struggling to make ends meet, with most turning to food banks and unemployment benefits. The ripple effect has been a slowdown in the U.S real estate sector.
Booming Seattle Real Estate Sector
Amid the slowdown, a new study by WalletHub has singled out Seattle real estate industry, which appears to be doing exceedingly well among all the other large cities in the country. Compared to other cities, Seattle is one of the fastest cities to sell real estate, given the strong demand in the market. For instance, the average home can remain in the market for a few days before being purchased.
Seattle ranks top in part because people have continued to buy houses in the city despite prices rising the fastest for the fifth consecutive month. Home prices in King Pierce and Snohomish counties continue to top national averages attributed to the strong demand.
Home prices in Seattle have mostly been bolstered by an uptick in the cost of affordable homes in the city. Prices have risen nearly 9% even as COVID-19 pandemic continues to take a toll on the economy. Buyers have flocked the industry to take advantage of the historically low mortgage rates in the wake of the Federal Reserve cutting interest rates to record lows.
The lure of under three percent mortgage is the catalyst behind young buyers flocking the market to try and buy homes. The WalletHub study indicates that millennials are buying homes in numbers more than ever. For instance, the number of Seattle millennials who received purchase loans to buy homes rose 21.8% in the first nine months of the year.
Likewise, Seattle scored 67.77 out of a hundred, the highest score of any large city when it comes to cities’ real estate sector health. Nashville in Tennessee came in a close second, followed by Austin Texas and Colorado Springs in Colorado at third. Amid the strong performance attributed to strong demand. Baltimore ranks as the worst real estate market among the biggest cities in the U.S. It was closely followed by Detroit and Chicago.
Fragile U.S Real Estate Industry
Amid the strong demand for houses in some cities across the U.S, the overall picture is one where real estate prices are increasingly falling amid the economic toll owing to the COVID-19 shocks. Indexes for office, retail, and lodging properties are slipping as indicated by July numbers. Transaction volume was down by 69% in July compared to the same period last year.
Deals have slowed as lenders remain reluctant to offer financing deals for people to buy homes. Likewise, the lenders have given borrowers the slack to defer payments as landlords also stay put in dropping asking prices.