Danielle Hale, chief economist for Realtor.com, recently released a revised economic and housing forecast. Residential sales nationwide are expected to decline 15% in 2020 versus 2019. Larger year-over-year (Y/Y) declines are expected in the second half of the 2020, when the virus-related impact is expected to be more significant. Inventory is still tight as total listings declined 19% Y/Y and new listings were down 29% the week of May 9. If new listings remain constrained and delistings remain common, inventory could tighten further in the weeks ahead.
Asking prices, however, have remained somewhat stable as they increased 1.4% Y/Y. Inventory (properties listed for sale) was tight prior to the pandemic, and with a significant number of potential sellers “on the sidelines” for the time being, inventory has tightened even further, which has propped up sales prices to some degree. Months of supply (inventory to sales ratio) nationwide declined from 3.9 one year ago to 3.4 currently, while in Alabama it dropped from 3.9 to 3.2. This dynamic (declining inventory to sales ratio) has kept sales prices somewhat stable, and current asking prices are 1.4% higher than one year ago. However, properties across the United States are selling an average of 13 days slower than May 2019.
When addressing overall economic and housing conditions in a weekly update to the COVID-19 housing market, Ms. Hale said, “So far, the pandemic has kept out sellers as much or more so than buyers. Limited availability of homes remains an issue, and helps keep prices up. We expect this balance to shift as the economy slows later in the year, so that by the end of the year prices could drift slightly lower. The economy and housing markets are making progress from extraordinarily low post-COVID levels, but the road to recovery will be bumpy. The path forward will depend on how policy makers react, society adapts, and medical breakthroughs progress.”
We will know more about the impact to residential markets when NAR’s existing home sales report and ACRE’s statewide residential report are released on Thursday, May 21, 2020. Refer to the tables below for a quick summary of April residential sales and pricing data from Alabama’s metro areas.
As expected, nine of 13 metro areas reporting data at this time show year-over-year declines in total residential sales, while sales prices have remained somewhat stable, increasing in all but two metro areas.