Tuesday, January 11, 2022

How omicron will affect the housing market

 What follows is an interesting take on how this new variant will effect the housing marketing in 2022.   This excerpt was taken from an article published on Realtor.com® written by By Janet Siroto

Jan 5, 2022.
 
 

Before the omicron variant of COVID-19 appeared on the scene, the 2021 housing market was rebounding healthily from previous waves of the pandemic and turned downright bullish as the end of the year approached. In spring 2021, a Realtor.com® survey found that only 10% of homeowners planned to sell within 12 months. By fall, that number had ballooned to 26%.

These factors had portended a tidal wave of home sales in the new year. And then the new omicron strain hit in November, followed by a December dip in new listings.

Was this sudden drop due to omicron, or just the typical holiday season lull?

George Ratiu, manager of economic research at Realtor.com, isn’t sure, but feels optimistic that omicron won’t halt the housing market’s momentum, particularly since this variant appears milder than its predecessors.

“We are not through it yet, but so far, this virus seems to be a lot more contagious, but also a lot less negatively impactful in terms of sickness and death,” Ratiu says. He also points out that data from epidemics in 1918 and the 1950s have also shown that viruses become more contagious but less severe over time.

Indeed, indications from South Africa, where the COVID-19 strain was first detected, showed a steep surge in cases followed by a rapid decline. So there’s some reason to expect that this latest wave of the pandemic in the U.S. will follow suit.

Omicron doesn’t seem to have hit the economy as hard as previous waves, either.

“The GDP and economy have survived fairly well,” Ratiu explains. “We’re seeing housing weather the variant so far. Retail sales, consumer confidence, and other indicators show guarded optimism in the road ahead.”

Bottom line: Even as COVID-19 infection rates climb, most experts aren’t bracing for a shutdown like we saw during the first wave of the pandemic in spring 2020.

“I do not believe that omicron will have much impact on the selling season,” says Cara Berkeley, a personal financial expert at Penny Polly. “The delta variant did not seem to slow things down here [in Tennessee], so omicron should not either. The number of homes sold in Nashville in November of this year was higher than the number sold in November of last year. The upwards trend both in sales and in the median price per home is continuing.”