According to the National Association of Realtors (NAR), pending home sales fell 21.8% in April and annual contract signings fell 33.8%.
This decline marks the second straight month of declines in the industry, with each major area in the nation reporting lesser numbers in both month-over-month contract activity, as well as far fewer year-over-year pending home sales transactions.
While such showings do seem to cast a dismal cloud over things, NAR’s Chief Economist Lawrence Yun presented an optimistic and hopeful perspective, encouraging us all to choose to believe that we have now hit rock bottom—and can only grow from here.
Yun said: “With nearly all states under stay-at-home orders in April, it is no surprise to see the markedly reduced activity in signing contracts for home purchases. While coronavirus mitigation efforts have disrupted contract signings, the real estate industry is ‘hot’ at affordable price points with the wide prevalence of bidding wars for the limited inventory. In the coming months, buying activity will rise as states reopen and more consumers feel comfortable about homebuying in the midst of the social distancing measures.”
In alignment with Yun’s positive outlook and predictions is data reported from NAR’s most recent Flash Survey, which revealed that 34% of its realtors were able to successfully complete almost every aspect of purchase transactions while still respecting all mandated social distancing protocols.
Also supporting Yun’s assertion that the industry is likely on its way up from the doldrums is data procured from realtor.com, which shows that new listings rose in April of this year when compared to this same time one year ago. This positive upswing occurred in 34 U.S. metro areas, among which included the regions of Virginia Beach, Virginia; Sioux Falls, South Dakota; Summerville, Georgia; and Las Cruces, New Mexico, among others.
As for realtor.com’s Chief Economist Danielle Hale, she was not surprised by the pandemic’s effects, and likewise supports Tun’s belief that better days are just on the horizon.
Hale said: “Because stay at home orders was still in place in many states, April pending home sales remain lower than last year. This means the U.S. housing market can expect another month of weak home sales for May. This summer, we predict activity to pick up in the housing market as buyers look to make up for a missed time after the shelter in place orders put the spring homebuying season on pause. Home sales could bounce back if sellers also enter the market with similar enthusiasm to buyers. Our latest weekly data shows an improvement in new listings declines, but inventory levels still remain well below levels seen this time last year.”