Last week the market report focused mostly on the number of closed sales in April 2020, which were down -23.2% compared to April 2019, and the latest number of weekly new pending sales, which was up +28.7%. I interpreted these two pieces of information to mean that the impact of COVID-19 was to decrease the number of real estate transactions, but we are already beginning to rebound from the decline. Today I will focus mostly on home prices. I will be both looking back at April closed sales and looking forward into June closed sales using the data from weekly new pending sales. Here we go:
- Looking back at prices in April 2020 compared to April 2019:
- The median sales price was up +8.3% and the average sales price was up +8.1%.
- The median sales price/square foot ($/SF) was up 6.3% and the average $/SF was up a more modest +3.9%.
- Looking forward using list prices of new pending sales over the past week:
- From 06May to 12May2020 the number of new contracts signed (283) was greater than any other 7 day stretch in 2020 to date.
- The average list price and median list price for new pending sales signed 06May to 12May surged +12% to +13% compared to the average over the past 2 months.
- Here are my predictions for May and June:
- I expect a steeper decline in closed sales for May 2020 compared to May 2019 than we saw for April 2020 vs April 2019. I wouldn't be alarmed if we see a -25% to -35% decline in closed sales for May 2020.
- Sales prices in May 2020 will be very similar to sales prices in May 2019, probably within ±5%.
- June sales in 2020 will rebound to within ±10% of June 2019.
- June 2020 sales prices will be at least +8% higher than June 2019.
There is still some concern that long term effects on the economy like increased foreclosures and high unemployment could weigh on the real estate market, but I don't expect them to have an effect for at least 4 months, and likely not until 8 months from now, and any long-term effects would be the result of a slow or incomplete economic recovery. Please contact me if you have any questions at 513-830-8227 or
beppert@pivotrealty.com. I would be happy to discuss this further.
