Pop quiz!!
What went up 424% since last year?
How about a rise of 647%? What showed that kind of an increase since a year ago?
The answer is not housing prices.
So, do you think the average house price went up or down in the last twelve months? The National Association of Realtors reported that the price of housing was up year-over-year more than 8%, according to this morning’s Wall Street Journal. The median home price in March was $280,600. But wait, how is anyone selling a home in this Covid-19 shut down? Most analysts expected the median home price to decline, and total home sales were actually down 8.5%.
So how did the median home price go up? Simple… supply was less than demand, because more people took their homes off the market. The actual number of listings, according to the NAR, went down 10.2% from a year earlier. It may be because sellers weren’t comfortable showing homes during a pandemic, or maybe many have opted not to move at this time. Things can, and will change, but for now pricing on homes is holding firm.
Back to our quiz. What went up 424%? Sales of frozen cookie dough! Been doing any baking since everything shut down? Seems like a lot of us have been. How about up 647%? - sales of flour and yeast! The home kitchen is getting a workout like some have never seen. There is even a program at North Carolina State University that wants to study your sourdough starter. But the offset here is in the restaurant industry. The National Restaurant Association reported a 26.5% decline in restaurant sales from February to March of 2020. That number will likely get worse in April as the shutdown of most restaurants continued. People still have to eat, so cooking at home it is.
Shifts like these in the economy can have dramatic impact. But the laws of supply and demand never change.
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