This post has been republished with permission from Mike DelPrete.
New listing volumes are an important lead indicator for the real estate market. The U.S., Sweden and New Zealand offer three contrasting case studies of pandemic response and real estate market recovery.
Varying drops in new listing volumes
The U.S. real estate market experienced a steep decline in new listings coming to market during lockdown in April and May. The recovery has been slow and gradual (a checkmark), with levels still down from last year. The pent-up supply from lockdown hasn’t hit the market, and there’s a huge hole in available inventory.
In New Zealand, there was a hard and fast lockdown that resulted in an immediate and sharp drop in new listing volumes. However, once lockdown was lifted and COVID-19 was no longer a concern, the market quickly bounced back to normal. Unlike the U.S., new listing volumes surged to higher than normal levels — a natural result of pent-up supply from the lockdown coming to market.
Sweden never really went into lockdown, and much of the country carried on as normal. The real estate market followed suit, with new listing volumes only dipping slightly in April and May compared to the same time last year. There is no real market recovery because the market never dropped away like in the U.S. and New Zealand (the summertime drop is seasonal).
Summary of evidence
All three countries are at different points on the spectrum of pandemic response and real estate market recovery.
Key observations:
- With the strictest lockdown, New Zealand experienced the largest drop in new listing volumes (65 percent), but recovered quickly with new listing volumes up 20 percent.
- With a moderate lockdown, the U.S. experienced a moderate drop in a new listing volumes (40 percent), but recovery is taking longer, with new listing volumes still down 5 percent compared to last year.
- With no lockdown, Sweden never experienced a drop in new listing volumes. The market continues to operate normally.
The data suggests that the harder the lockdown, the bigger the drop in new listing volumes — and the faster the recovery.
Mike DelPrete is a strategic adviser and global expert in real estate tech, including Zavvie, an iBuyer offer aggregator. Connect with him on LinkedIn.