The spring selling season is a wash, and the recovery the National Association of Realtors (NAR) sees coming won't be enough to make up ground lost this year to the coronavirus pandemic.
The trade group said Wednesday, April 29, that its Pending Home Sales Index (PHSI) for existing single-family houses fell 20.8% year over year in March and that contract signings year over year were down 16.3% nationwide.
At March's end, the PHSI stood at 88.2, the NAR says, with 100 representing the level of contract activity in 2001.
All four regions saw their PHSI fall year over year. The Northeast stood at 82.3, down 14.5% from February and 11.0% from March 2019. The Midwest PHSI was at 85.6, down 22.0% in a month and 12.4% in a year.
The West's PHSI plummeted 26.8% from February and 21.5% from March 2019 to 71.4. Only the South notched a PHSI above 2001 levels, at 103.7, but pending home sales were still 19.5% less in March than in February and 17.8% less than March 2019.
Some recovery, but a year in the red
The PHSI, which is based on a sample typically representing about 20% of transactions for existing-home sales, is considered a leading indicator because it's based on contract signings that typically lead closings by a month or two. The NAR also says signs are pointing to a modest recovery.
"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," said Lawrence Yun, the NAR's chief economist, in the trade group's report this week.
But, Yun added, "The usual spring buying season will be missed … so a bounce-back later in the year will be insufficient to make up for the loss of sales in the second quarter." He projected a 14% decline in sales for the year.
Shoppers virtually checking back in
Realtors and home shoppers are using virtual tours and other technologies to stoke interest in selling and buying, and Zillow (NASDAQ: Z) (NASDAQ: ZG) just reported a sharp rise in viewings on its online marketplace after a sharp decline as the pandemic gained serious traction in March.
And, because of the continuing shortage of inventory, home prices are holding up despite a decimated U.S. workforce and social distancing-imposed hindrances on showings and closing activities. Yun says he expects the national median home price to increase 1.3% for the year, with local variations and a likely reduction in the median price at the top end of the market.
Slowly to market and steadily out of town
As vice president of business solutions at Leading Real Estate Companies of the World (LeadingRE) -- a provider of technology, training, and trend watching for 565 broker-owners and their 130,000 affiliated agents -- Jennifer Harding talks daily to people selling single-family homes across the country.
She says interest has been picking up among buyers and sellers over the past couple of weeks, online and in person. "Properties are still going on the market slowly, but I think sellers are beginning to feel a little more comfortable, and those that do go on the market are often getting multiple offers in a day or two," Harding says.
She says that's particularly true in the suburban and smaller markets, where her LeadingRE members work. "The major metro areas, they're having a harder time," she says. "And we hear a lot more about people wanting to move from the cities to the suburbs."