Summer is the new spring
One of the side effects of the coronavirus is that it morphs the passage of time. The disruption of daily routines makes hours crawl by with agonizing slowness even as months fly by in the blink of an eye. The pre-pandemic days of late February are a lifetime ago and the normal progression from past to present has been altered.
Which of course, seques into today’s column since the usual flow and regular timing of the real estate market has gone a bit wonky too. The sales data that just came in for May is out of sync with the market and at odds with the experience of the last three months.
When sales figures came out for March and April they were better than anyone expected. The number of closings was only down 40% – an incredibly positive sign given the huge limitations around sales. More importantly, the median price held remarkably firm around $950k, due to constrictions around new listings coming on.
Restrictions began lifting in May and the market felt like it was opening up. Showings increased and heading into the last half of June, there are plenty of stories circulating about the market being “back” with multiple-offers and crazy over-bids. And yet… the sales data for May makes it look like the market is going the other way.
Spoiler Alert: It may bum your chi to read further because I’m going to share some disappointing sales data. Here are the numbers for May based on a year-over-year comparison on homes sold country wide
# of Sales: Down significantly with 89 closings compared to 146 in May 2019 (95 in April 2020)
Median Price: $100k lower, $850,000 vs. $947,000 in May 2019 ($949k in April 2020)
Amount of Inventory: 4.6 months in 2020 vs. 3.7months in May 2019 (3.6 mo in April 2020)
What gives? Why do the numbers look worse at the same time the market feels like it’s doing so well? The answer is that closed transactions in real estate are always trailing indicators. They usually occur 30-60 days after properties first go on, offers are made and escrows are opened.
Recorded sales never jibe with what’s happening in the moment and May’s closings were a reflection of the worst period of shelter in place that happened in April. Just as March and April closings were mostly a reflection of the market prior to March 17th. Looking ahead, it appears that summer 2020 is going to be the new spring of 2020 and we may have to gear up for a little March Madness in July