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March Home Sales Dip as Coronavirus Clamps Down on U.S. Housing Market

[Updated: May 20, 2020 ] Apr 22, 2020 by Marc Rapport
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Ohio real estate agent Julie Barnett Hoffman is seeing in real time the effects of the coronavirus pandemic that are now showing up in stats from the National Association of Realtors (NAR).

The NAR reported Tuesday (April 21) that sales of existing homes nationwide fell 8.5% from February to March to a seasonally adjusted annual rate of 5.27 million, although they remained slightly above March 2019 figures.

That follows closely on the heels of a report that 90% of Realtors who responded to an April 12-13 survey have seen buyer interest decline as the COVID-19 pandemic accelerated.

Hoffman was not one of those survey respondents but says the slowdown in her central Ohio market became pretty evident over the past two weeks as she was showing homes to a young couple in and around Galion.

"This is not a big market anyway and in general with things slowing down, we've run out of homes to look at, and they've backed off for now," she says.

Her experience reflects the national data. "Earlier in the year we watched inventory gradually tick upward," says NAR chief economist Lawrence Yun in their report. "But with the current quarantine recommendations in place, fewer sellers are listing homes, which will limit buyer choices."

On the upside, inventory is moving and price gains continue

The gloom isn't all doom, though. People who were selling in March saw their properties stay on the market an average of 29 days in March, moving a full seven days faster than either the month before or the year before, the NAR says.

Total inventory also was 2.7% higher at the end of March than in February but down 10.2% from this point last year, the NAR report says. Those 1.5 million single-family homes, townhouses, condos, and co-ops yield a 3.4-month supply at the current sales rate, the trade group says, compared with three months of inventory at the end of February and 3.8 months' worth at the end of March 2019.

Prices also are doing fine, from a seller's perspective. A summary of this month's report shows an 8% jump in the median existing-home price for all housing types to $280,000 at month's end, compared with $259,700 a year ago. That makes 97 straight months of year-over-year gains, the NAR says.

And while each of the four major regions in the country reported a dip in sales, with the West seeing the largest decrease, each region did experience that rise in median price, too.

Social distancing and sanitizers on the wall

The most recent Pulse survey also found that 93% of sellers had responded to social distancing and other precautions by changing their behavior to help their homes sell, if they remained on the market.

Hoffman has seen that herself. "I carry my own hand sanitizer but I saw hand sanitizers mounted on the wall in some of the places we've been," she says. "Lots of glove-wearing, too, since we're touching door handles here and pulling drawers open there. And most of the homes I've been showing have been empty."

Indeed, sellers simply not wanting anyone in their homes right now, and employment loss and uncertainty, will continue to be a drag on the market until conditions improve.

"Significantly more listings are needed," says Yun at the NAR, "and more will come on the market once the economy steadily re-opens."

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