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Realtor.com Launches Weekly Housing Recovery Index

June 15 2020

Data shows housing recovery remains strong despite social unrest

SANTA CLARA, Calif., June 11, 2020 -- COVID-19 and economic headwinds have led to unprecedented disruptions in the U.S. real estate market. In order to track the impact of these events, realtor.com today announced the launch of its Housing Recovery Index, which shows that despite continued COVID cases and the large scale protests that took place the week ending June 6 -- the U.S. housing market continues to recover even in cities experiencing civil unrest.

The proprietary index leverages a weighted average of realtor.com® search traffic, median list prices, new listings, and median time on market and compares it to the January 2020 market trend, as a baseline for pre-COVID market growth. The overall index is set to 100 in this baseline period. The higher a market's index value, the higher its recovery and vice versa.

For the week ending June 6, the realtor.com® Housing Market Recovery Index was 88.8 nationwide, 11.2 points below the January baseline and up 1.0 point over the prior week. The slight increase in this week's overall index represents a 5.7 point increase over the 83.1 low point in the index, which occurred during week ending May 2.

"By combining online search activity along with price and supply dynamics, the index functions as a robust leading indicator of housing activity, and a symptom gauge as we move toward healthier market conditions," Javier Vivas, director of economic research for realtor.com®.

This week's index reading also reveals the recovery trend was not impacted in the 11 markets that saw the largest number of protests the week ending June 6. On average, these markets saw their recovery index increase 0.7 points over the prior week, ending May 30. When compared to other similar sized markets with reportedly less civil unrest, there was no evidence that the protests had an impact on housing recovery. Of the 11 markets, 6 areas saw slight increases in their weekly recovery index:

  • Atlanta (+1.5 points)
  • Chicago (+4.7 points)
  • Cleveland (+3.3 points)
  • Los Angeles (+0.2 points)
  • Minneapolis (+0.3 points)
  • New York (+4.9 points)

Five saw a slight decrease in their weekly recovery index:

  • Dallas (-2.0 points)
  • Louisville, Ky (-2.1 points)
  • Raleigh (-0.7 points)
  • St. Louis (-0.9 points)
  • Washington, D.C. (-1.1 points).

Key Housing Metrics for the Week Ending June 6:

 

"The general sentiment from consumer surveys is that now is not a good time to sell a home because of COVID, economic uncertainty, and social unrest, but the data is saying the opposite," said Danielle Hale, chief economist for realtor.com. "Home prices are back to their pre-COVID pace and we're seeing listings spend slightly less time on the market than last week. But the housing market still needs more sellers in order to meet the surge in demand. Looking forward, if we don't get the inventory we need, we'll see prices rise even more and homes sell faster later this summer."

New listings: Nationwide, the size of declines held mostly steady this week, dropping 21 percent over last year, which is a slight improvement over last week and a significant improvement when compared to early May's 30 percent declines year-over-year. This week's index shows new listings are 12.7 points below their January recovery baseline. Sellers have started June on the right foot, and the following weeks will indicate whether there will be enough supply to boost home sales this summer, nationwide and in all large markets. The continued declines in newly listed properties mean the full wave of spring sellers has yet to return to the market. However, recovery could be on the horizon as more than half (56 of 99) of large metros continue to see smaller declines this week, including New York, Boston and San Francisco.

Asking prices: Price gains fully caught up to pre-COVID pace increasing 4.3 percent in the week ending June 6, compared to 4.4 percent the first two weeks of March. This week's index shows home prices are 0.7 points above the January recovery baseline. The mix of homes for-sale has reverted back toward pricier properties, and demand for entry-level properties has been reignited. Price gains have accelerated rapidly in recent weeks with inventory on the decline and buyer interest on the rise. Locally, 89 of 100 metros saw asking prices increase over last year.

Total Active Listings: Sellers are still playing catch up during what's normally the busiest part of the season, and the availability of homes for sale remains well below seasonal levels. Total active listings declined 25 percent compared to a year ago as the lack of sellers is currently outweighing the extra time homes spend on the market. Signs, such as improved home purchase sentiment over last month, are pointing to rising home buyer interest and seller confidence, setting up a pick-up in sales activity in the summer months.

Time on market: While homes are still sitting more than two weeks longer on the market than this time last year, this week's data shows the trend may be reverting back toward recovery. The week ending June 6 saw the first weekly decline in time on market since mid-March, with days on market one day faster than last week. It could still take a few more weeks for time on market to reach pre-COVID levels, since the pace of sales component of the recovery index remains 30.1 points below the January recovery baseline, but this week's data shows the first, important step toward recovery.

For more information about the index report, please visit: https://www.realtor.com/research/housing-market-recovery-index/

For the latest weekly housing trends and index data, please visit:

About realtor.com®

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