Our research team releases regular monthly housing trends reports which break down inventory metrics like the number of active listings and the pace of the market. In light of the developing COVID-19 situation affecting the industry, we want to give readers more timely weekly updates. You can look forward to a Weekly Housing Trends View near the end of each week. Here’s what the housing market looked like last week.
Weekly Housing Trends View
- Time on market: Slower to react, time on market now clearly shows the impact of fewer new home listings coming to market and properties sitting for-sale longer, as fewer buyers submit offers nationwide and in half of large metros. In the first two weeks in March (our pre-COVID-19 base), days on market were 4 days faster than last year on average. Last week, median days on market were one day greater than the year ago level, and we expected time on market to rise. This week’s data showed that time on market was 6 days or 10 percent greater than last year, the biggest increase in time on market since 2013. This is the first clear sign of for-sale homes sitting on the market longer, waiting for buyers. It’s visible in local data as well as the national figures, with 54 of the largest 99 metros showing similar double-digit percent increases in time on market from one year ago. Importantly, analysis of metro data from last week shows a strong link between the prevalence of COVID-19 in a market and increasing time on market. In the 10 worst-hit metros, time on market was up 15 percent, compared to just a 2 percent increase among the 10 least-affected metro areas, analysis detailed here.
- New listings: Past the peak? Declines in newly listed for-sale homes persist nationwide and in nearly all (97 of 99) large metros, but the size of declines shrank compared to last week. Persistent declines still show that many sellers are reevaluating or postponing sales rather than wading into the current uncertain housing market.
In the first two weeks in March (our pre-COVID-19 base), new listings were increasing 5 percent year-over-year on average. In the most recent three weeks ending April 4, and April 11, and April 18, the volume of newly listed properties decreased by 31 percent, 47 percent and 42 percent year-over-year, respectively. While this improvement is small and only visible in one week of data, far below the threshold we’d need to declare that we’re past the worst in housing, we see a similar trend in nearly three-quarters of the top 100 metros (73 of 99) including several hard-hit areas like Seattle, Boston, and New Orleans. The largest drops in new listings persist in Detroit, New York, and Philadelphia.
Additionally, analysis of metro data from last week shows a strong link between the prevalence of COVID-19 in a market and fewer new listings. In other words, areas particularly hard-hit by COVID-19 were showing the strongest seller reactions, as detailed here. - Asking prices: Sellers hold asking prices steady and the mix of homes for-sale shifts toward more lower-priced homes.
In the first two weeks of March (our pre-COVID-19 base), median listing prices were increasing 4.4% year-over-year on average. In the most recent three weeks ending April 4, and April 11, and April 18, the median U.S. listing price posted an increase of just 1.6, 0.8 and 0.3% year-over-year, respectively, the latter marking the slowest pace of growth since 2013. Viewed another way, asking prices typically increase in the spring. Last year, the median list price rose more than 4 percent from early March to early April whereas this year the median list price has remained flat in that same window.
Sellers that are choosing to sell now seem to recognize the market challenges and may be pricing homes less aggressively upon listing than they were pre-COVID which is why we are seeing steady asking prices. Majorities of buyers and sellers do not anticipate large-scale price declines. A survey from the National Association of Realtors conducted April 19-20 shows that 53 percent of buyer agent clients expect home prices to increase or decline only mildly (by less than 5 percent). Similarly, 89 percent of agents with seller clients had either not reduced their asking price or had done so by less than 5 percent. These results support trends we’re seeing in the listing data. So far we’re seeing a smaller share of asking price reductions compared to this time last year in the U.S. and three-quarters (74 of 99) of top metro areas.
Additionally, high-cost areas such as the northeast have seen some strong seller reactions–de-listings and fewer new listings–which has shifted the distribution of homes for sale nationwide toward a lower price point. - Total Active Listings: Countervailing forces continue to pull total listings in opposite directions. Data shows stable declines in total active listings and expect this trend to continue.
Total active listings are pulled in two directions: 1) downward by the sharp drop in new listings, increase in delistings and decrease in the previous momentum of buyer appetite outpacing housing supply; and 2) upward by properties spending more time on the market as buyers who once avidly pounced on for-sale homes now hesitate to make major purchases in an uncertain economy. On balance, we think total active listings will continue to decline, but at a very gradually slowing pace. Weekly data show total active listings declined 15% compared to a year ago, with the pace of declines remaining nearly constant since mid March.
Buyers and sellers holding back in response to COVID
In addition to it’s weekly listings data, realtor.com conducted a quick survey of its users from April 15-17 and here are a few key findings.
- 38% of buyers are looking to postpone their home purchase citing the economy and worries about the ability to tour homes.
- Buyers claim to be spending more time on real estate sites/apps. Floor plans and detailed property information top their list of asks from these providers
- 77% of the sellers surveyed are also looking to buy a home. More than half of those had neither listed their home yet nor found a home to buy
*Some data points for Los Angeles and Las Vegas have been excluded due to data unavailability.