- Existing home sales dropped to wider-than-expected -8.5% in March
- Sales figures based on contracts signed mostly in January and February
- National Association of REALTORS® chief economist anticipates -30%-40% decline in coming months
The National Association of REALTORS® (NAR) just reported that sales of existing homes dropped -8.5% in March compared with February sales to an annualized pace of 5.27M units. This -8.5% drop in resale homes was a larger decline than anticipated.
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These sales figures are based upon closings that had signed contracts in late January and February prior to the COVID-19 pandemic locking down much of the economy.
According to Laurence Yun, chief economist with NAR, said, “We saw the stock market correction in late February. The first half of March held on reasonably well, but it was the second half of March where we saw a measurable decline in sales activity.”
Coupled with the -8.5% decline in existing home sales was a steep -10.2$ drop in the supply of homes for sale by the end of March. Sellers who had previously listed their homes for sale delisted them and sellers who had previously wanted to list their homes didn’t. Neither sellers nor buyers wanted to do in-person home touring.
All this being said, homes are still selling, according to Yun, and agents have kicked up their virtual tours and their live virtual showings.
Price growth in March continued to be strong with median existing home prices hitting a +8% annual increase to $280,600.
How much prices will continue to grow in the future is up in the air. Danielle Hale, chief economist with realtor.com, said, “Going forward, we’ve seen both homebuyers and sellers report feeling less confident and many are making adjustments to the process. Already, sellers are getting less aggressive with asking price growth, and we’re seeing roughly half as many new listings come up for sale this year versus last year.”
Look out for price growth to slow in future months along with fewer home sales, particularly in markets where local economies are driven by hospitality, tourism and leisure.
Regional existing home sales drops month-to-month looked like this in March:
- West – -13.6%
- South – -9.1%
- Northeast – -7.1%
- Midwest – -3.1%
Thanks to CNBC’s Diana Olick.
Also read: Podcast: Breaking News, SHORT SALES Expected To Spike | Real Estate Crash News, Seattle Market Still Hot Despite Being Early Epicenter of Coronavirus, America to Struggle More with Economic Disparities After COVID-19 Subsides