Existing-home sales fell 8.5 percent in March to a seasonally adjusted annual rate of 5.27 million units — a drop caused in no small part by coronavirus-induced market anxiety.
According to the latest data by the National Association of Realtors (NAR), sales are still up 0.8 percent year-over-year after a year of mostly increases. Year-over-year sales have been rising for months.
“Unfortunately, we knew home sales would wane in March due to the coronavirus outbreak,” NAR Chief Economist Lawrence Yun said in a prepared statement. “More temporary interruptions to home sales should be expected in the next couple of months, though home prices will still likely rise.”
Despite the drop in sales, home prices are still at a high — a median home in the US costs $280,600, up 8 percent from last year. There were a total of 1.5 million housing units on the market at the end of March – a 2.7 percent increase from February but a 10.2 percent drop from last year. At the end of March, there was a 3.4-months supply of unsold houses at the current sales pace.
That said, properties that did sell did so faster — the average home remained on the market for 29 days, down from 36 days both last month and in the same period last year. The number of first-time buyers buying properties rose in March while the number of investors doing so fell slightly.
“Earlier in the year, we watched inventory gradually tick upward but with the current quarantine recommendations in place, fewer sellers are listing homes, which will limit buyer choices,” Yun said. “Significantly more listings are needed and more will come on to the market once the economy steadily reopens.”
Starting in March, the outbreak changed how almost everyone in real estate operates — 93 percent of homesellers changed how they did showings to align with social distancing and other outbreak-related precautions. NAR predicts the virus will continue to wreak havoc on existing sales and the market as a whole as people hold off on both buying and selling due to economic uncertainty.
“We have seen an increase in virtual home tours, e-signings and other innovative and secure methods that comply with social distancing directives,” NAR President Vince Malta said in a prepared statement. “I am confident that Realtors and brokerages will adapt, evolve and fight, ensuring the real estate industry will be at the forefront of our nation’s upcoming economic recovery.”