Since the housing market reached what many see as its bottom in mid-April, signs of recovery have emerged in May. While the spring home-buying season was delayed due to state shut-downs, the summer is anticipated to be 2020’s peak home-buying season.
According to realtor.com’s May Monthly Housing Trends report, data shows that the national median listing price hit a new all-time high of $330,000 in May, rising 1.6% year over year.
This price growth was an improvement over April’s 0.6% year-over-year growth, which was the slowest pace in the past three years. Additionally, the weekly progression of data showed that price growth and new inventory trends improved.
Despite the COVID-19 pandemic, listing prices hit a new high. In 35 of the 50 top metros, realtor.com said that listing prices could reach new highs throughout the summer home-buying season.
“May’s home price data demonstrate the underlying strength of the U.S. housing market despite the challenges brought by the COVID-19 pandemic,” said realtor.com Chief Economist Danielle Hale. “The fact that home prices are at all-time high shows that the momentum the market had prior to the pandemic has helped to keep buyer and seller expectations stable. Ongoing inventory shortages, that continue to worsen, also push home prices higher even while homes sell more slowly.”
“As a sense of normalcy returns, we expect to see a shortened, but strong summer home-selling season, as long as seller confidence continues to improve and more homes are listed for sale,” Hale continued.
Specifically, May listing prices in Los Angeles-Long Beach-Anaheim, California were up 14.9%; Pittsburgh, Pennsylvania up 14%; and Cincinnati, Ohio-Kentucky-Indiana up 12.1%, posting the highest year-over-year median list price growth.
The steepest price declines were seen in Detroit-Warren-Dearborn, Michigan, down 3.4%; San Antonio-New Braunfels, Texas, down 3.2%; and Seattle-Tacoma-Bellevue, Washington, down 3.1%.
Median list price began in May up 1.4% and strengthened throughout the month, increasing 3.1% during the last week. New listings were down 29.1% the week ending May 9, and were down 22.9% by the week of May 30.
While still well below last year’s levels, the rate of decline in newly listed properties has improved from a drop of 44.1% year over year in April to down 29.4% in May, realtor.com said.
Realtor.com says that nationally, inventory is still constrained, down nearly 20% year over year because of the pandemic.
On top of this, COVID-19 has increased the number of days that homes stay on the market. According to realtor.com, it’s 15 days.
Inventory declined 21.9% year over year in May, a greater rate than April’s 16% decline.
The metros that saw the largest declines in inventory were those on the East coast hit the hardest by COVID-19, including Philadelphia-Camden-Wilmington, Pennsylvania-New Jersey-Delaware-Maryland, down 38.6%; Providence-Warwick, Rhode Island-Massachusetts, down 35.8%; and Baltimore-Columbia-Towson, Maryland, down 34.5%.
This month, none of the largest 50 metros saw an inventory increase on a year-over-year basis and 43 out of the 50 saw greater yearly inventory declines than last month.