Redfin, Seattle, said new listings and home sales are seeing early signs of recovery in U.S. housing market, even as some cities struggle to flatten the coronavirus curve.
The report found that in areas where real estate has been deemed an “essential service,” both housing supply and demand is beginning to strengthen, even if the community has not yet experienced a peak in COVID-19 cases.
Redfin examined delistings, new listings and home sales in Chicago, where COVID-19 continues to trend upward; Seattle and New Orleans, which have flattened the curve; and Detroit, which has also flattened the curve but did not deem real estate essential. Its findings:
Chicago: The metro area hasn’t yet experienced a peak in COVID-19 cases. There were still nearly 3,000 new cases a day as of May 4. “Despite this, both housing supply and demand are strengthening here,” Redfin said.
–Detroit: The only metro in the analysis where real estate was not deemed an essential service—meaning agents are unable to show homes and visit with clients while the state’s stay-at-home order is in place—Detroit flattened the curve in early April. Michigan began relaxing restrictions on May 7. “Of the four metros in our analysis, it is experiencing the weakest housing market rebound, despite having flattened the curve,” Redfin said.
–New Orleans: The area experienced a relatively dramatic rise—and subsequent fall—in coronavirus cases, surpassing 2,000 daily new cases on April 2 and then quickly falling to below 500 about a week later. “Both housing supply and demand are strengthening here,” Redfin said.
–Seattle: The first reported epicenter of the U.S. coronavirus outbreak, it was also the first metro in the analysis to flatten the curve—in late March—thanks to early social distancing and testing. “Both housing supply and demand are strengthening here,” Redfin said.
“While consumers are still hurting from this pandemic, we’re starting to see early signs of recovery,” said Redfin lead economist Taylor Marr. “Supply and demand have begun to strengthen, even in places where COVID-19 is still on the rise, as homebuyers and sellers start to see a light at the end of the tunnel. This has allowed prices to remain stable.”
The report noted a surge in home delistings was one of the first signs that the housing market was experiencing a coronavirus-driven downturn. Nationally, delistings hit a record during the 28-day period ending April 9, when nearly 75,000 homes (one of every 13 houses for sale) were pulled off the market. That compared to just 47,000 during the same period in 2019. Delistings have since slowed in most markets, but are still far more common than they were at this time last year.
Redfin said nationally, new listings bottomed the week ending April 14 at 48,000 homes—half the amount during the same period last year. They’ve since started to rebound in most markets, climbing to around 62,000 homes nationally during the week ending May 1.
As supply collapsed in April, so did demand, the report noted—although it has seen a relatively quick comeback in some markets. The number of homes under contract to be sold plummeted nationally by 43% to 32,000 during the week ending April 16, as buyers backed away from the market amid skyrocketing unemployment. Sales have since started to recover.