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48 | M REPORT O R I G I NAT I O N S E R V I C I N G DATA G O V E R N M E N T S E C O N DA R Y M A R K E T THE LATEST DATA Home Selling to See Rise Following Shelter-in- Place Orders 77% of potential sellers are expected to sell following the pandemic. T he National Associa- tion of Realtors (NAR) reports that 77% of poten- tial sellers are preparing to sell their homes following the end of the stay-at-home orders. "After a pause, home sellers are gearing up to list their proper- ties with the reopening of the economy," NAR Chief Economist Lawrence Yun said. "Plenty of buyers also appear ready to take advantage of record-low mortgage rates and the stability that comes with these locked-in monthly pay- ments into future years." The NAR's Economic Pulse Flash Survey revealed that 5% of Realtors said clients are shifting neighborhood preferences from urban areas to the suburbs due to COVID-19, and 13% reported buy- ers have changed at least one home feature that is important to them. Additionally, 73% of Realtors said their clients haven't reduced listing prices to attract buyers. This comes despite a significant number of buyers expecting sell- ers to drop prices. The survey found that 21% of buyers are expecting prices to drop by 5-10% and that 6% of buyers are expect- ing prices to fall by 11-15%. The survey also found that 42% of buyers are delaying purchases by several months and that 17% have stopped looking due to COVID-19. Sixteen percent said there was no change to their buying strategies. Buyers looking to delay pur- chases do not bode well for the spring homebuying season, which Zillow forecasted a 60% drop in home sales this spring. The forecast calls for a 2-3% drop in prices through the end of the year, followed by a steady recovery throughout 2021. Zillow says home prices could recover at a pace of about 10% each month through 2021. "Much uncertainty still ex- ists, particularly with some states beginning to reopen and experts warning of a possible second wave of the coronavirus in the fall. However, housing fundamentals are strong—much more so than they were leading into the Great Recession—and that bodes well for housing in general," said Dr. Svenja Gudell, Zillow's Chief Economist. "Despite the difficulties, we're seeing several signs that there is still a good amount of demand for housing, and buyers, sellers, and agents are growing more comfort- able moving transactions forward where possible. For those who need to sell, buyers are out there, and there are ways to embrace technology and practice social dis- tancing to ensure a safe process." Zillow Chief Economist Svenja Gudell said that technology is helping move transactions for- ward, and its 3D home tours have increased by 600%. Homebuilders Slashing Prices 22% of builders cut home prices in April. T he National Association Homebuilders (NAHB) reported that 22% of builders cut home prices in April. According to the report, builders cut prices in an attempt to entice buyers and up sales numbers, as well as lessen any cancellations that present or potential buyers would otherwise be forced to go through due to a sudden change in finances post-COVID-19. Among the 22%, data revealed that where builders were located affected the statistics greatly. Specifically, build- ers living within the South accounted for roughly 26% of those who cut home prices, followed by 23% of builders hailing from the Midwest. Fewer builders located in the West and Northeast regions of the U.S. made any move regarding home prices, with the West only having 13% of its builders bending to adjust prices, and the Northeast's builders only reporting 12% among them switch- ing things up with home costs. This total percentage of builders who reduced prices is a statis- tic that is well below the share experienced in the nation's last housing recession. In fact, the 22% is less than half of the 52% expe- rienced in May 2007 and 49% that was seen in March 2008. Among the 22% of builders who cut price tags, the average actual amount of decrease in cost was 5%, a much smaller cut than the last recessions of May 2007 or March 2008 as well. May 2007 reported 7%, while March 2008 reported 8%. The NAHB previously reported that builder confidence in the market for newly built single- family homes rose an impressive seven points to 37. Experts explain that this stabi- lization and present positive senti- ment among builders could most likely be attributed to the fact that home construction was considered "essential," which allowed workers in the residential construction industry to continue working and earning, even amid the worst of the recent lockdown crisis. The NAHB recently reported that the overall costs for residential construction materials fell more than ever recorded in April. Prices paid for industry goods fell 4.1%. The NAHB recently reported that the overall costs for residential construction materials fell more than ever recorded in April. Prices paid for industry good fell 4.1%.