Even though we are in the third week of June, statisticians are just coming out with a snapshot of the real estate market for May. According to Redfin’s Tim Ellis, the housing market showed some early signs of recovery in May due to the addition of homes for sale and contracts to buy homes, both increasing dramatically from April levels.
But the market remains overall very competitive thanks to a continuing shortage of homes for sale.
Home prices in the U.S. only saw a 0.5% year over year in May to a median of $299,400 across the 217 metros areas, according to Ellis. “This was the smallest annual increase since home prices bottomed out in February 2012. However, the fact that this increase was so much smaller than the 4.7% gain in April was largely due to fewer homes being sold in the most expensive metro areas.”
Of course, it isn’t easy to compare these figures to a year ago, when the economy was not shut down, and people were not sheltering in place. And the priciest areas (with median prices above $450k) took the biggest hits, seven of the top twelve in California, seeing declines of between 38% and 58% from a year earlier.
Ellis reports that an even more encouraging sign is the bounce back in the number of newly-constructed homes that were listed for sale in May. Other measures of competition in the market such as days on market and the share of homes sold above list price have remained relatively steady throughout the shutdowns and stay-at-home orders across the nation.
Now that regional economies are beginning to recover, people are out in droves looking at homes, finally set free while donning face masks and carrying bottles of hand sanitizer. All the market needs now is more inventory.
Source: Redfin – TBWS