Sales Take a LARGE Hit
The Lamacchia Housing Report presents overall home sale statistics and highlights the average sale prices for single families, condominiums, and multi-family homes in Massachusetts and New Hampshire for May 2020 compared to May 2019. It also looks at other metrics in Massachusetts like Homes Listed for Sale, Homes Pending, and Price Adjustments made to active listings, as they are often the best indicators for predicting future trends in the market.
This month the report will be particularly unique and dramatic due to the impacts of COVID-19 and the massive amount of home sellers that didn’t list their homes in late March and early April when the lockdown first hit.
Massachusetts Home Sales Down 35.9%
Out of character for this time of year but no surprise to us given the lack of homes that were listed for sale a month earlier, the number of homes sold is down when compared to last May due to the COVID outbreak. All three categories decreased; single families by 30.6%, multis by 48.3%, and condos by 45.3%.
Prices however increased by 3.4%, less than we’d see normally but a good sign under the given circumstances. All three categories increased in price; single families by 1.5%, multis by 16.1%, and condos by 1.1%.
Homes Listed for Sale:
There was a 32.6% decrease in the number of homes listed for sale in May 2020 over May 2019. This was actually worse in April and is much improved in May. But many sellers still held off in May due to concerns about job loss and the spread of the virus, but as safer showing practices have been implemented more and more, we are now seeing more and more sellers list their homes. Undoubtedly not at the level it should be but a big improvement over March and April.
As you can see in the chart below, homes listed nosedived in late March and stayed down for much of April but are starting to climb back up in May. They’re not where they should be yet but they’re working hard to hopefully get there this summer.
For the full report, visit MARealEstateUpdates.com.
Pending Home Sales:
The number of homes placed under agreement was also down significantly in May 2020 compared to May 2019 and again is due to the COVID-19 outbreak. As we always see when the stock market takes a nosedive, buyers back out of deals some of whom already regret it. As well, deals fell apart in March and hit the bottom in the beginning April as the stay at home mandates caused some businesses to close, and some buyers to lose their source of income thereby no longer qualifying for mortgages because of layoffs, furloughs, and unemployment. Pending sales were down 48.1%, 4,781 deals. May, however, is steadily recovering as the number of pending deals has been increasing since it hit bottom in the first week of April.
For the full report, visit MARealEstateUpdates.com.
Price Changes:
Prices changes decreased by 684 homes, 54.6%. With inventory so low, buyers are usually willing to pay what sellers want for the sellers that are realistic with their list price and are likely prepared to strike in a bidding war. Low inventory causes buyers to have to compete with one another, which is why we are still seeing prices rise despite the current circumstances.
New Hampshire Home Sales Down 41.5%
Like Massachusetts, New Hampshire saw a decrease in sales and an increase in prices when compared to May 2019. Sales saw a 41.5% decrease with 599 fewer sales in all three categories and a 14% increase in prices by $44,280.
What’s Ahead?
With the extreme slowdown in new homes listed in late March, April, and the beginning of May we fully expected and predicted that homes sales would be down in May and will be again in June. It was impossible not to. Homes sold are always the lagging indicator and that’s what happened here. It’s expected that the market would respond to recent events with a downturn in April and early May, but we are already seeing the correction as things gradually climb back to where they would normally be this time of year. As you can see in MARealEstateUpdates.com and NHRealEstateUpdates.com, our pages monitoring the progress of the market, everything as of early May is steadily climbing back to where it should be this time of year.
Most sellers are back in gear prepping their homes for a Summer sale to take advantage of the buyer demand due to the low inventory, and agents are implementing safe showing protocols to ensure the safety of sellers, buyers, and other agents. Buyers should be getting themselves prepared for potential bidding wars as buyers are still competing for the inventory that’s out there.
Buyers have paused on purchasing due to market concerns, and sellers have paused because it’s obvious most homes sell quicker than it takes to find a new home. Many sellers are worried that as soon as they list, they’ll sell and have nowhere to go, but that doesn’t have to happen.
Our COVID-19 Resource page is a tool designed to answer questions that homeowners, buyers, and sellers have about how all of this will impact their real estate goals. There are weekly videos in which Anthony explains the market and how it’s being impacted, blog resources, news articles, and more. For those seeking information on what their mortgage companies expect and are willing to offer their borrowers during this time, we also created a COVID-19 Mortgage Resource page.