It comes to no surprise that the pandemic has caused a significant impact on the US housing market. With quarantine orders in place and states on lockdown, people are less likely to move, let alone begin the process of buying and selling when the end of all of this is nowhere in sight.
Redfin recently released charts showing just what the COVID-19 virus has done to the market and the results might surprise you.
What the market is seeing here is a slow increase in demand for listings, but a stagnant listing sector. Consumers are expecting the local shelter-in-place orders to begin to lax. But the number of new listings has yet to catch up to the traffic that property portals have been seeing.
The homebuying market is only up 15% since before the virus reached pandemic levels, with new listings dropping by 22% during the same period. This means that there is less inventory to meet the increasing demand.
In tandem, sellers aren’t dropping their prices. With the number of listings stagnant, sellers are taking advantage of desperate buyers. A Redfin survey found that only 3% of homes dropped their prices in the most recent week.
Adam Weiner, Redfin’s Chief Growth Officer, explained:
“Despite the increase in new listings over the past two weeks, there were fewer than 700,000 homes for sale in Redfin markets across the U.S., which is the lowest inventory level we’ve seen anytime in the past five years.
“Some of the new inventory hitting the market may be coming from buy-and-hold investors. Since the beginning of the pandemic, we’ve heard stories of Airbnb landlords with sudden unexpected vacancy putting their homes up for sale.”
Redfin explained that for the month of April, 8% of active listings were pulled from the market, and though demand is growing, sellers are still removing their listings from the market at a significantly higher rate in comparison to the same time last year.
This news is in stark contrast with consumers in other markets. 99acres had run a similar survey which showed that 90% of Indian consumers are expecting the prices of homes to drop significantly because of the pandemic.
In the UK, agents have been rallying, calling for consumers to keep their listings on the market and wait to see what happens.
The global real estate industry is still in chaos. Each market is reacting in its own way in response to the different issues arising from the COVID-19 pandemic. Experts are confident in a bounce-back but whether or not consumers are willing to keep their listings up until then is another story.