Hello and thanks for joining us on another weekly data adventure where we track the impact of COVID on the residential housing market. This week we’ll feature information from our weekly report as well as some of our showings trends and buyer and seller activity by price point.
We reached a major milestone in overall market-wide showing activity. Almost two months to the day, showing activity has finally surpassed its previous high for the year so far. Our previous peak in showings before the pandemic was on March 8th. On May 7th, we’ve finally surpassed that level. The recent dip is the result of an unseasonably cold Mother’s Day weekend.
Remember: stats may be seasonally adjusted but Minnesotans are seasonably adjusted.
Breaking activity down by price point, it’s clear that showings were up almost across the board. Interestingly, it was only that $300-400K segment that showed declines. That’s a segment that has shown decent gains in activity, which is consistent with other signs of strength in those “middle market” ranges. Perhaps a brief cool-down was in order before the next leg up. Homes between $200-250K had one of the largest gains in showings. That segment hasn’t seen gains as robust as other ranges, but it’s good to see that segment exhibiting signs of strength. That’s a very popular first-time buyer range, perhaps reflecting a return of younger, first-time buyers who were anxious about the economy but also eager to take advantage of absurdly low interest rates and a less-crowded environment.
Some segments that had gains in showing activity could still show declines in market share from week to week. That’s because they didn’t increase as much as other segments but had a larger market share in the baseline period. Just under one in four showings featured properties priced under $200K; while just over one in five showings occurred on homes priced between $200-250K and another roughly one in five showings were for homes between $250 and 300K. One in one hundred showings were on properties priced over $1M.
Next up is change in showing activity by price point. Nearly every price point showed growth, with the strongest gains in the $200-$250K and $600-$800K price ranges. Only the $300-$400K segment experienced declines in showing activity.
Pulling directly from our weekly report found here, we can see how new listings (seller activity) have been on the rise for the last three weeks. However, sellers still haven’t returned to early-March levels. Overall, buyers are eager for additional listings and inventory, so this is welcome news.
Despite being on the increase for two weeks, pending sales are closer to their mid-March highs than new listings. This increase in signed purchase agreements shouldn’t come as a surprise, since we’ve been tracking gains in showings which is a leading indicator of demand. Gains in showings and pendings typically translate into increased sales eventually.
A comparison of new listing activity over the last four years may offer additional perspective into this measure of seller activity. Here again we get confirmation of an uptrend in new listings coming onto the market. The recent dip can also be attributed to an unseasonably cold weekend. The question will be whether and how any pent-up listing activity will move the needle on the supply side of the equation.
Putting pending sales activity in context with the last three years also reinforces and confirms the growth we’ve seen on the buyer side. Buyers seem a bit more eager than sellers lately, and it’s likely we’ll see a decent amount of pent-up demand unleashed once there’s more confidence around the health situation and as some restrictions are eased.
Lastly we have our week-to-week change in new listings and pending sales by price range. Sellers of homes priced over $1M nearly doubled their listings activity from last week, despite a 25.0 percent decline in buyer activity in that segment. There was also an increase in new listings between $750K-1M, despite a 45.8 percent dip in buyer activity. In the under $250K segment, buyer and seller activity were in line with one another. It’s nice to see gains in activity as that segment was hard-hit early on.
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, May 14, 2020 (2:00 PM to 3:00 PM). Registration is required.