As the coronavirus pandemic drags on, it continues to take a toll on the housing market, as home price growth continues to soften and the number of new homes for sale plummets, according to the most recent realtor.com® data.
The median home list price was up just 0.3% year over year on realtor.com in the week ending April 18 in the 100 largest real estate markets. The previous week it was up 0.8%, the week before that it was 1.6%, and there was a 2.5% rise in the week prior to that.
“We’re seeing prices slow down. They haven’t dropped, but they have slowed down significantly,” says realtor.com Senior Economist George Ratiu. “Prices are likely to decline moderately over the next months and a lot steeper later.”
The national median home price held steady at $320,000, virtually unchanged for the past six weeks. While most real estate experts believe prices will remain strong, with no fire sales like around the Great Recession, this spring buying season definitely won’t be as strong as in previous years.
After all, about 26 million Americans filed for unemployment in the first five weeks of this crisis.
Many buyers, about 38%, are simply waiting for the health and economic crisis to pass to purchase a home, according to a recent realtor.com survey. The survey was conducted April 15–17.
“Pricing your home the way you did two months ago is impractical,” says Ratiu. “In a normal market, a lack of inventory pushes prices up. In the current market, the lack of inventory indicates sellers are not confident they can sell their homes at top dollar.”
The number of new listings on realtor.com has continued to fall. Sellers worried about having buyers inside their homes, not being able to fetch a good price, and moving during a pandemic are pulling their homes off the market. Many would-be sellers are deciding to wait until the crisis is over to put their properties up for sale.
The number of new listings dropped 42% in the week ending April 18 compared with the previous year. The prior week the number of listings fell 47%, and they were down 31% in the week before that.
“Sellers are reacting [to this crisis] by choosing not to put their homes up for sale,” says Ratiu.
In another sign that COVID-19 has upended the housing market, homes are sitting on the market for six days, or 10%, longer than last year. That’s the biggest increase since 2013.