Welcome back to another weekly market update. Every week we utilize showing data and other indicators to measure the impact of CV-19 on the housing market. This week we begin with new listings and pending sales straight from our Weekly Market Activity Report. The 2020 new listings trend (in blue) began to level out somewhat between the weeks ended March 28 and April 4. We can see that in 2019 new listings began to take off at this time of year in part due to seasonality but also partly due to pent-up listing demand that was held back by inclement weather.
Looking a bit closer at new listing activity—this time using averaged daily activity vs. weekly snapshots—we can see how seller activity this year has clearly been restrained compared to past years. All other years saw a jump in new listing activity around the end of March or beginning of April. Currently, sellers listed about as many homes this past week as they did at the beginning of February.
Below is our pending sales trend from our weekly report comparing current and year-ago activity levels. Similar to new listings, buyer activity has also been trending downward and has crossed below 2019 levels after spending most of the year hovering above 2019 levels. Pending sales are roughly back to end-of-February levels, so buyer activity hasn’t come down quite as much as seller activity. This of course varies by price range and area.
Again honing in on average daily activity while expanding our view to the last three years instead of one, the break in the trend from past years is even more evident. Also note the growth in 2019 figures once that pent-up demand was unleashed. Weather, interest rates, stock market swings, consumer confidence, income/earnings, household growth, the broader economy and many other factors all impact buyer (and seller) activity.
This week we’re also looking at our inventory trend. It’ll be no surprise to most readers here that inventory levels—or the active supply of homes for sale—have been quite low and suppressed for some time (for a multitude of reasons to be summarized in a future post). That said, the trend between 2019 and 2020 inventory has been similar, even though the levels have been lower this year. For a moment, it even looked like this year was starting to close the gap between the two, which is exactly what buyers want and what the overall market needs—more supply. During the week ended March 21 we began to see a divergence between this year’s and last year’s trend. By the week ended April 4, not only had the growth slowed, but the number of active listings on the market began to tick downward.
And finally, on to showings. After a relatively sharp decline, showings have been on an uptrend since April 3. The latest showings numbers updated through April 12 illustrate that tentative recovery. It has been a “V-shaped” and not “U-shaped” recovery (some suspect the same will hold true for the economy). Most recently, one may notice what looks like a sharp decline, but that’s due to reduced activity during the Passover and Easter holiday weekend and preparation for Ramadan. This is common and to be expected; it happens on every major holiday, to varying degrees. Don’t let the “noise” overpower or detract from the information and insights.
As is always the case and as mentioned above, activity can vary quite a bit by price range and area. This highlights showing activity by price range. Here we can see not just the number of showings compared to the prior week within each price range but also how various price ranges compare to one another for both the current and prior week. If you’re squinting, pinching and zooming to try and determine just what’s happening in those luxury segments, your patience will soon pay off.
For those of us who get excited about market share figures (I know! they’re one of my guilty pleasures too), this next one is for you. Here we can see what percent of overall showing activity fell within each price point for both the current and previous weeks. One observation is that homes priced between $200K and $249K most recently received 18.6 percent of overall showings while those priced between $250K and $299K claimed 19.0 percent. This is a flip from the previous week ending April 5 when the $200K to $249K segment saw 21.1 percent of showings while that next range up saw 17.5 percent.
There’s a pretty good chance this next one is the one you’ve been waiting for. This shows the change in showing activity from week to week by price range. At the onset of the pandemic there was a fairly clear pattern where the upper brackets saw more of a decline in activity than the first-time buyer and mid-level brackets. But after the first weeks of decline, the week-to-week change has been more variable. It’s important to benchmark each price range with the overall market-wide change of +0.7 percent. It may not seem like much, but despite the variability within and between price ranges, there were overall more showings than the prior week. Again, that’s possibly an early sign that showings activity could be turning a corner.
Thanks for reading and be sure to tune in next week.
Join MAR’s Director of Research and Economics, David Arbit, for a free weekly 1 hour presentation and discussion around the impact of COVID-19 on the Twin Cities real estate market Thursday, April 16, 2020 (2:00 PM to 3:00 PM).