Survey finds a majority of investors believe U.S. home prices will contract up to 20%
(SAN FRANCISCO, Calif.) — NEWS: Certain Lending released a national survey of real estate investors. A majority of real estate investors expect COVID-19 will cause home prices to decline up to 20%.
The survey of 569 real estate investors across the U.S., conducted between April 20 and 24, is the first of its kind to report how real estate investors believe COVID-19 will impact the U.S. economy, housing markets, and mortgage credit. The full survey is available at https://medium.com/certainlending.
“Non-institutional real estate investors own and make a living from $7 trillion of real estate. They are an untapped source of insight about how events and forces shape the U.S. economy and housing market,” said Shreyas Vijaykumar, cofounder and chief technology officer for Certain Lending. “We are excited to engage the community and report insightful findings about COVID-19’s expected impacts.”
The survey finds that relative to the 2009 recession, known as the U.S. housing crisis, half of real estate investors believe the impact of COVID-19 will be more severe for the U.S. national economy. Three quarters of real estate investors expect COVID-19 will cause home prices to decline, but the magnitude will be less severe than during the U.S. housing crisis. A majority expect home prices will decline up to 20% because of COVID-19.
According to the survey, approximately half of real estate investors expect it will be a good time to buy properties over the next six months with about as many planning to increase their personal investment in real estate over the time period. 90% of real estate investors believe the U.S. economy will rebound within 18 months.
With the weak economy and real estate cooling, a majority of real estate investors expect supply to increase across online realtor listings, off market channels, short sales, foreclosures, and distressed-property auction websites.
The survey finds 38% of real estate investors think it will be harder to get a loan, and 32% don’t know if financing will be easier or harder in the next six months.
Added Charles McKinney, cofounder and chief executive officer of Certain, “With anxiety about the economy, freezing of the capital markets, and many commercial lenders pulling back, traditional ways of getting a loan has become more expensive and less likely. For lenders with the credit sophistication and software to efficiently underwrite and originate loans in the COVID-19 economy, there’s a huge opportunity to consolidate market share.”
About Certain Lending:
Certain Lending is a FinTech startup cofounded by Freddie Mac and Palantir Technologies alumni and backed by Founders Fund, 8VC, Goldcrest, XYZ, Village Global, and the LeFrak organization. With Certain Lending, real estate investors get tailored financing offers in one place and close loans in days, not weeks. For financial institutions, Certain creates favorable yield from business purpose mortgages fully underwritten, originated, and monitored by our software.
For more information about the company, visit https://www.certainlending.com/.
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