Last month we took a look at the market activity for April, which was the first full month in which the stay-at-home order restricted real estate sales.
In May, the stay-at-home order continued, but some restrictions were lifted. Most notably, homebuyers were allowed to schedule showings (albeit with some restrictions). I predicted a possible catch-up period in new listings that were put on hold while restrictions in place.
But did that happen? Were the buyers still interested? Let’s find out.
May Market Data
As before, we will look at this data in the month-to-month context, but also compare with the same month from 2019 as a baseline.
May and April’s new listings numbers give us a good overall picture of what’s going on.
In April, when showings were restricted, new listings dropped off significantly (a 61% reduction compared to April 2019). I’m assuming this is largely due to concerns that fewer buyers would be willing to make offers on houses without taking a tour first.
But in May, new listings rebounded (1,466 new listings in May vs 572 in April). However, comparing new listings this May to May of the previous year, there was a 17% drop in new listings.
This defied my expectation that there might be a catching-up period in May, where sellers would attempt to make up for time lost in April. However, it seems the market has at least resumed activity.
But did anyone make offers to purchase these new listings? It appears so!
Pended listings — those on which an offer to purchase was accepted — followed a similar trend. Compared to May 2019, May 2020 saw 4% fewer pended listings.
While it’s a reduction over the previous year, the difference is pretty marginal.
For those curious, April 2020 saw a 58% drop in pended listings over the previous year.
Have prices changed? Will prices change?
The average residential sale price in the greater Grand Rapids area in May 2020 was $256,005. Compared to a May 2019 average of $262,899, this accounts for a negligible 2% drop in average prices.
This by itself doesn’t give you the whole picture, because it doesn’t tell you what types of homes were listed or where the listings were. But as a blanket average of a large market, it gives you a general sense of where things stand.
As for what’s to come in real estate prices, it’s hard to say at this point.
Using May 2019 as our baseline, we saw less new listings this May, only slightly less pending listings, and only a slight drop in prices.
While there were not enough new listings and pending sales to make up for the sharp declines in April, market activity has resumed in some capacity.
Happy to receive feedback
I will probably do at least one more market analysis at the end of July, just to see how recovery from the lockdown progresses as businesses are allowed to reopen.
Are these market updates and analysis something you’d like to see more of? Are there any specific real estate questions you have?
You can email me to let me know. Or drop by my Facebook page, where I post my blog links, and leave a comment there. While you’re there, be sure to hit ‘like’ so you will see updates from me on your feed!