Mid-April was the low point for the coronavirus-impacted markets, according to realtor.com®’s May Monthly Housing Trends report. May numbers are showing improvement, with the national median listing price reaching a record high of $330,000 (a 1.6 percent growth YoY).
Here’s the breakdown for highest YoY median list price growth:
– Los Angeles-Long Beach-Anaheim, Calif. (+14.9 percent)
– Pittsburgh, Pa. (+14.0 percent)
– Cincinnati, Ohio-Ky.-Ind. (+12.1 percent)
These metros saw the deepest declines:
– Detroit-Warren-Dearborn, Mich. (-3.4 percent)
– San Antonio-New Braunfels, Texas (-3.2 percent)
– Seattle-Tacoma-Bellevue, Wash. (-3.1 percent)
Prices are increasing due to a continued housing shortage—new listing inventory was down 29.1 percent for the week ending May 9, recovering slightly for the week of May 30 (dropping to 22.9 percent). The best indicator of market recovery, however, is the slowdown in new listing declines, which was 44.1 percent YoY in April, and went down to 29.4 percent in May. Days on market are still slow—homes are sitting for 15 days longer than this time last year.
These are the top five metros with the largest declines in new listings:
– Philadelphia-Camden-Wilmington, Pa.-N.J.-Del.-Md.(-50.3 percent)
– Buffalo-Cheektowaga-Niagara Falls, N.Y. (-43.2 percent)
– Providence-Warwick, R.I.-Mass. (-41.9 percent)
– New York-Newark-Jersey City, N.Y.-N.J.-Pa. (40.7 percent)
– Baltimore-Columbia-Towson, Md. (-40.3 percent)
“May’s home price data demonstrate the underlying strength of the U.S. housing market despite the challenges brought by the COVID-19 pandemic,” said realtor.com® Chief Economist Danielle Hale. “The fact that home prices are at an all-time high show that the momentum the market had prior to the pandemic has helped to keep buyer and seller expectations stable. Ongoing inventory shortages, that continue to worsen, also push home prices higher even while homes sell more slowly.”
“As a sense of normalcy returns, we expect to see a shortened, but strong summer home selling season, as long as seller confidence continues to improve and more homes are listed for sale,” Hale added.
What will the recovery look like? According to Zillow’s recent Home Price Expectations Survey, conducted in partnership with Pulsenomics, missing home sales from spring will likely be spread out over the next several years. Of those surveyed, 10 percent believe the coronavirus market impact will continue into the summer, with sales rebounding later in 2020. Twenty-two percent of respondents, however, believe sales will “double up” next spring, with recovery spread out over several years.
“This is the first time since 2012 that the panel-wide price outlook has turned negative, and the quarter-to-quarter swing in expectations is the largest we’ve seen in more than a decade,” said Terry Loebs, founder of Pulsenomics. “Longer term, the outlook for home values nationwide is mixed—price projections for 2022 and beyond actually inched higher from levels recorded prior to the COVID-19 outbreak. However, nearly seven in ten experts now indicate that their five-year forecast has downside risk. Last quarter, fewer than four in ten panelists foresaw downside—of course, that was before the Covid-19 crisis, its economic devastation and unprecedented government response.”
“Experts’ forecasts on the future of housing vary widely at this early stage of the recovery,” said Skylar Olsen, Zillow’s senior principal economist. “Our forecast has become more optimistic as we ingest new data and watch pending sales pick up faster than expected. What does seem more consistent in this wisdom of crowds is that full recovery is a couple years away—much faster than in the last housing downturn—remote work will eventually work its changes on the housing market.”
Sources: realtor.com and Zillow