The national real-estate market appears to be playing out as expected in the COVID-19 environment, with pending home sales down by double-digit figures in March, but the National Association of Realtors is still expecting any declines to be of a temporary nature.
Each of the four major regions of the nation saw drops in year-over-year pending-sales figures, albeit by differing degrees. Overall, the National Association of Realtors’ Pending Home Sales Index, based on contract signings, decreased 16 percent from a year before.
The index posted declines from a year before of 11 percent in the Northeast, 12 percent in the Midwest, 18 percent in the South and 22 percent in the West.
“The housing market is temporarily grappling with the coronavirus-induced shutdown, which pulled down new listings and new contracts,” acknowledged Lawrence Yun, chief economist for the National Association of Realtors.
As he has from the beginning of the pandemic, Yun predicted any downturn would be of a short-term rather than long-term variety.
“As consumers become more accustomed to social-distancing protocols, and with the economy slowly and safely reopening, listings and buying activity will resume, especially given the record low mortgage rates,” he said.
But the loss of a healthy spring season is likely to impact the bottom line when it comes to 2020 sales. The latest projection is for a January-to-December decline of 14 percent from 2019.
“Although the pandemic continues to be a major disruption in regards to the timing of home sales, home prices have been holding up well,” Yun said.
In fact, he predicted the possibility that – due to an already tight supply of housing inventory before the virus hit – sellers may end up getting record-high prices for the remainder of the year.
“I project the national median home price to increase 1.3 percent for the year,” Yun said, acknowledging that there will be variations among local markets and that, in some areas of the country, upper-end homes will take a price hit for a combination of factors.