While there are unknowns about how the coronavirus pandemic will ultimately impact the real estate industry, a new report suggests it may be slowing the market down.
As COVID-19 has sparked widespread stay-at-home orders and business shutdowns across the country, the volume of newly listed properties in March, according to Realtor.com’s monthly housing trends report, was down 6.4% compared to the year before.
Newly listed properties
The decline in newly listed properties was more pronounced by the end of March. In the week that ended March 28, the volume of newly listed properties had decreased by 34% compared to the volume that same week the year before. This was 2020’s biggest drop, according to the digital home listings platform.
The drop, Realtor.com noted, could be an indication that sellers are rethinking their plans to sell or postponing them as the COVID-19 crisis continues to evolve in the spring. Many home sellers consider spring to be a good time to sell — not only can the weather be nice, but many parents want to be in their new home before the school year starts.
The total number of homes on the market showed further declines in March. Home inventory dropped nationally in March by 15.7% year over year, Realtor.com noted, a faster rate of decline than the 15.3% year-over-year decline in February. (Year over year refers to the comparison of data from one period of time to the same period 12 months earlier.)
However, by the end of the month, the rate of the decline in home inventory appeared to slow. During the week ending March 28, housing inventory — per Realtor.com — showed a year-over-year decline of 15.2%, compared with a drop of 16.8% in the week ending Feb. 29.
The trends report suggests this could indicate that homebuyers may be putting off their plans in response to the disruptions caused by COVID-19. Two surveys early in March also suggested that some buyers were beginning to rethink their plans to purchase a home in light of COVID-19.
There are also signs that home prices could take a hit from the uncertainty surrounding the pandemic.
The median listing price in the U.S. grew by 3.8% year over year in March, to $320,000. However, that was slightly down from the 3.9% year-over-year growth in the median listing price in February. In the week ending March 28, the median listing price had only grown by 2.5% year over year, the slowest pace of growth since 2013 when Realtor.com began tracking that metric.
With the coronavirus pandemic having such a major impact on the economy, it may make sense for some consumers to put a pause on homebuying or selling plans simply to see how the next couple of months play out. In the interim, first-time homebuyers — in particular — may benefit from using the time to research programs when they’re ready to move forward.