Home sales booming despite pandemic and recession as homeowners seek more space: NPR
For months after the start of the pandemic, Caroline Wells and her husband worked remotely from their home in San Antonio while trying to herd their two young children. She says the house has virtually no yard and is on a busy street. It was therefore not possible to send the children outside to play.
“Probably the worst time was when I was actually in a focus group organized by my company to hear the needs of parents,” Wells said. The Zoom call kept freezing because everyone in the house was using Wi-Fi at the same time, including his 6-year-old son, who was hiding in a fort made of blankets and chairs in the living room .
“I had to crawl into the fort to get it off the Internet, I had to finish the Zoom call on my cell phone in the closet with the door locked to the floor,” Wells explains. “I was telling myself that I can’t even participate in a discussion group about the difficulty of working from home because it is so difficult to work from home!”
That’s when she decided, “I can’t do this.”
That’s a big part of what’s driving home sales right now – people want more space.
Despite the steepest drop on record in a recession, historically high unemployment and uncertain prospects for the economy, the housing market is in tears.
“Home sales are quite remarkable given that we are still in the midst of the global pandemic,” said Lawrence Yun, chief economist for the National Association of Realtors. He says after falling off a cliff in the spring, home sales have now more than recovered.
In June, sales of existing homes jumped more than 20%, a record. Then they broke that record in July with a almost 25% gain. Yun says the pace of home sales is now up about 9% from a year ago, and the median price of homes and condos has hit a new record high of $ 304,100.
The boom looks likely to continue. This week, the Realtors Group said pending home sales remain on the rise.
Yun says low mortgage rates are definitely a driving force – these have also broken records. But he says people working remotely and wanting more space are also a big factor.
In Wells’ case, she and her family began to search for homes in suburban San Antonio. They offered more than the asking price and still outbid the first house they liked. But they found another one, made an offer, and they buy it for $ 376,900. It is a four bedroom single family home on almost 2 acres on a quiet cul-de-sac with a large backyard for the kids.
Wells says she can’t wait to let the kids out in the yard because, so far, “we’re just shooting movie after movie to keep them entertained so we can work.”
The real estate boom is a sign of the strange recession that this is about. Millions of Americans are out of work and in dire financial straits. The 10.2% unemployment rate is still about as high as it has ever been since the Great Depression. Twenty-seven million people perceive unemployment at last account. But many other people work remotely and economy a lot of money because they don’t spend it on restaurants or plane tickets for the holidays.
Homeownership rates for African Americans and Latinos, which are lower than those for whites, fell sharply after the housing crash ten years ago, but Yun says before the pandemic they were start to recover.
Cesar Escobar is a Chicago Housing Advisor at Northwest Side Housing Center, a non-profit organization that offers classes to many minority home buyers. “There are a lot of bungalows, of houses,” says Escobar. “Once you have a family, it’s a good neighborhood to live in.”
And Escobar says Zoom Call’s home buying courses are full, and the desire to stop paying rent to a landlord and become a homeowner is alive and well. “If I pay that much rent, I might as well buy a house,” he says, many clients tell him. “They want to build their equity; they want to have something in their name or for their children.”
Because so many people are trying to refinance or buy a home, the mortgage system can be overloaded right now. This caused a problem for Wells and his family in San Antonio.
She and her husband didn’t want to close the new house until they sold the old one. And she says people who bought her old home saw their loan unexpectedly stuck in arrears for weeks.
Wells and his family had moved out, put just about all of their belongings in storage, and ended up staying with the family. And this week, they found themselves stranded in a hotel while awaiting approval for that loan.
“Every day is like another sad text or call from our realtor, ‘No news guys, like sorry,’” she said earlier this week. She says it’s been “a lot of sleepless nights, a lot of asking if it was worth it, but trying to be hopeful.”
But hope has paid off. Wells now says the sale has just ended and they can move into their new home. So the kids can build a new fort, this time in the backyard.
Ashish Valentine contributed to this report.