A month and a half ago, spring of 2020 looked like it was going to be the most competitive home shopping season in years, according to a new report from Zillow. Then the coronavirus pandemic struck and sent the number of new listings into free fall.
The report, out Thursday evening, shows that by April 5 new listings across the U.S. had fallen 27.1 percent compared to the same time last year. This is despite the fact that, as the report notes, “new listings typically pick up in late March and early April as home shopping season kicks into gear.”
Moreover, the report notes that the total number of active listings is down 8.3 percent. Inventory, meanwhile, is up 2.5 percent since March 1, which according to the report “indicates homes have been sitting on the market for longer while buyers have pulled back.”
This is not how the spring was supposed to go.
The report explains that home price growth accelerated in February for the first time in two years. And on March 1, new listings in the U.S. were actually up 17.3 percent year-over-year. The takeaway from those late winter numbers was that the spring market looked like it was going to be hot.
“As March began, the housing market appeared poised for the most competitive home shopping season in years,” the report notes.
The pandemic — which has brought widespread quarantines and social distancing mandates — changed the course of the market by tanking the economy. Though the full damage is yet to be determined, millions upon millions of people have applied for unemployment benefits, the stock market has begun seesawing and real estate agents almost universally expect to lose business.
Zillow’s report also shows that not all markets were impacted equally. By April 5 Pittsburg, for example, saw new listings fall by 58.1 percent year-over-year. In New York City, new listings dropped 56.6 percent. In Philadelphia they fell 52.7 percent and in Boston they fell 46.6 percent.
However, in Phoenix new listings had fallen by just 0.9 percent year-over-year on April 5. Sacramento, California, Tampa, Florida, and Columbus, Ohio, also all saw smaller-than-average drops in their new listings as compared to a year ago. Phoenix was also among a handful of markets that saw the number of new listings actually increase between March 1 and April 5 (as opposed to year-over-year).
The report ultimately concludes that “buyers, sellers and their agents have begun to change their behaviors as they adapt to public health requirements.”
Zillow economists Skylar Olsen additionally called recent unemployment figures “striking” in the report, and said that sellers are “adopting a wait-and-see approach as uncertainty continues to rule.”
But she expressed some optimism as well.
“It is possible that this year’s busy home shopping season is pushed into winter as some opt to hang back but activity continues from those who need to buy or sell for a job move or another major life event,” Olsen said. “What’s not likely is that the bulk of potential home sellers and buyers simply throw up their hands and pull back from the market entirely.”
Read the full report here.