People are buying houses across the U.S. despite the economic slowdown and returning COVID-19 concerns. Leading the recovery are the West and Northeast, while COVID-19 concerns and economic impact are slowing recovery in the South and Midwest
Nationwide improvement is reported by Realtor.com. Their Housing Market Recovery Index reached 97.8 for the week ending July 4 – the largest weekly increase since the index was introduced.
Boston, San Francisco, Denver, Philadelphia, and Los Angeles show the greatest improvement. Demand and pace of sales surpass pre-COVID benchmarks, according to the overall recovery index.
Denver is among the four most recovered markets for housing supply with a new listings growth index between 120 and 129. San Jose, Boston, and New York are the other most recovered markets for housing supply.
Improvement comes from large jumps in pace of sales, which continues to move quickly towards recovery, and little movement in housing demand, which remains well above recovery.
It’s a good sign, considering in June the number of homes listed for sale across Colorado fell 39 percent compared to the same time last year, according to a report from the Colorado Association of Realtors (CAR). With stay-at-home orders lifted, buyers are buying the limited housing inventory, pushing the number of homes under contract up more than 30 percent – to 11,650 – over 2019.
The more seasonal markets are benefiting the most as the bulk of activity shifts to the summer months. In addition, the housing slowdown is linked closely to the spread of COVID-19 with markets with higher cases per capita more likely to see a bigger impact on supply and the pace of sales, reports Realtor.com.
Finally, resilient economies and those with strong job markets may have an edge in the housing recovery. Buying and selling are rising faster in areas with thriving tech sectors than in the rest of the country.
The speed and sustainability of the reopening, and each market’s ability to contain COVID-19, are dictating the speed of recovery across the regions.
The West continues to lead the recovery with an index of 104.4 – now above the pre-COVID benchmark. The Northeast also surpassed the recovery baseline last week at 102.1, and continues to improve. The South – 96.4 – and Midwest – 85.4 – are lagging but appear to be showing steady recovery.
Nationally, sellers continue returning to the market at a cautious pace. Further improvement may be slowed by coronavirus concerns, economic uncertainty, and civil unrest.
In addition to housing supply, the measured components include housing demand with 48 of the 50 largest markets above the recovery trend; home price with an increase in the number of markets above the recovery trend; and pace of sales with 21 of the 50 largest market seeing improvement in time on market.
For the full report visit realtor.com/research/topics/real-estate-market-outlook.
By Tom Kalinski. Tom is the broker/owner of RE/MAX of Boulder, the local residential real estate company he established in 1977. He was inducted into Boulder County’s Business Hall of Fame in 2016 and has a 40-year background in residential and commercial real estate. For questions, e-mail Tom at [email protected], call 303.441.5620, or visit boulderco.com.