The spring and summer months are traditionally the hottest home-buying season, but one housing expert predicts sales to drop as much as 40% during that time because of the coronavirus outbreak.
“Market activity will be lower in the next couple of months,” Lawrence Yun, chief economist of the National Association of Realtors, said in a press conference. “I won’t be surprised if sales activity could be down 30% or even 40% in the next months.”
Still, Yun doesn’t expect prices to decline as sales ebb in the upcoming months.
“There’s no indication that fewer buyer activity will lead to price declines,” Yun said. “Sellers won’t [decrease] prices and buyers aren’t expecting lower prices.”
‘We knew home sales would wane’
March sales activity partially captured the effects of the efforts to contain the pandemic, which included social distancing and the shutdown of non-essential businesses in many parts of the country.
While housing sales edged up 0.8% from a year ago, the increase was boosted largely by sales of homes priced at $250,000 and higher. Homes priced at $100,000 or less saw a 18% drop in year-over-year sales, while homes between $100,000 and $250,000 fell 4%.
“Unfortunately, we knew home sales would wane in March due to the coronavirus outbreak,” Yun said.
The median existing-home price for March across all housing types stood at $280,600, an 8% uptick from a year ago. Overall, March added to 97 consecutive months of year-over-year price gains.
‘Significantly more listings are needed’
Another March statistic that foretells what’s to come for the housing market is the disappearing number of sellers.
Last month’s inventory of 1.50 million homes for sale was the lowest March figure on records dating back to 1999, according to the NAR. That was also down 10.2% from a year ago.
The current inventory sits at a 3.4 months supply, meaning it would take that long to sell every house on the market, a decrease from 3.8 months in March 2019.
Read more: Buying a home: Everything you need to know
“Earlier in the year, we watched inventory gradually tick upward but with the current quarantine recommendations in place, fewer sellers are listing homes, which will limit buyer choices,” Yun said in a press release. “Significantly more listings are needed and more will come on to the market once the economy steadily reopens.”