April 22 2020 Market Update
The ebb and flow of the real estate market have not stopped with the "shelter in place order" and at the same time, the market is not immune to the changes happening around us. We have many more insights now than we did at the beginning of April and here are the big takeaways I've found that are important for buyers, sellers and those waiting to see what's going to happen.
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For now, let’s compare the first 3 weeks of April to the same time one year ago and see what we find. I’ve used single family homes for this analysis.
This year, 5074 homes came on the market. Last year, 7,540 came on. That's 33% fewer new listings than last year and the same percent as was the case when I looked at this 2 weeks ago. Consistency is a good thing here. So far this month, 3,498 houses are under contract and last year, 5071 homes went under contract. That’s 31% fewer pending sales or, 1,573 homes. That's pretty close to how many fewer new listings have come on the market. The pending to active ratio, which we use as a leading indicator is 69% now and 74% last year. This is also good news, all things considered. There are certainly fewer pending sales and there are also fewer new listings with a difference of 1576 more new than pending. There are also 1,401 withdrawn and expired listings so far. So we have 5074 new listings - 3,498 pending sales - 1,401 off-market homes leaving a net increase of 175 single family homes. That's an increase of about 1%.
It's hardly enough to affect the short or long term supply of homes and therefore should have no long term negative impact on prices.
In other words, we are not really adding more homes than we can sell and that should mean that when the market reopens completely, it doesn't look like we will have shifted into a buyers market.
Earlier this month, I recommended waiting a little while longer to list your home if you were able. Since then, we have had new listings receive as many as 15 showings and multiple offers in a weekend and other listings with low showing activity. There are some trends developing with this so my advice now is that we have to look more deeply at the hyperlocal level to find out whether it's a good time to list. For some, now is the time, for others, it might be a couple more weeks out. That's an improvement in the recommendation from just a couple of weeks ago and positive for the coming months!
For now, financing is still readily available so it is a non-issue at the moment. As before, if things reopen for the most part in early May, the real estate market should be fine. I