Basic Economics ? or Not!
Why are Sales UP, Listings UP and Values UP? Basic Supply and Demand are in play.
While the stock market recovered significantly in March, the effects of COVID- 19 to the economy continue to build. In just the last four weeks, more than 20 million people filed initial unemployment claims according to the United States Department of Labor, fueled by stay at home orders and a slowdown of economic activity across the country. Added to the unemployment claims from March, more than 30 million people have become unemployed since COVID-19 has become widespread in the U.S. In the face of these challenging times, real estate activity in April slowed significantly.
Closed Sales decreased 31.1 percent for Detached homes and 32.6 percent for Attached homes. Pending Sales decreased 40.0 percent for Detached homes and 45.2 percent for Attached homes. Inventory decreased 38.0 percent for Detached homes and 18.0 percent for Attached homes. The Median Sales Price was up 4.4 percent to $680,000 for Detached homes and attached Homes 4.2 percent to $437,000.
Days on Market decreased 33.3 percent for Detached homes and 27.6 percent for Attached homes. Supply decreased 38.5 percent for Detached homes and 17.4 percent for Attached homes.
While the effect of COVID-19 continues to vary widely across the country, it is expected that social distancing, higher unemployment, and lower overall economic activity is likely to continue to constrain real estate activity in the near term. At the same time, the industry is adapting to the current environment by conducting business using technologies such as virtual showings and e-signing to help buyers and sellers with their housing needs in the face of these challenges.
In April, the stock market pared some of its March losses while overall economic activity nationally continued to slow. With more than 20 million initial unemployment + 7.3% – 0.3% claims filed nationwide in April on top of more than 10 million initial claims in the last two weeks of March, suddenly much of the country is out of work, at least temporarily. This dramatic economic slowdown is reflected in this month’s real estate activity, which is down significantly.
For the 12-month period spanning May 2019 through April 2020,
Pending Sales in the San Diego were down 1.2 percent overall.
The price range with the largest gain in sales was the $1,250,001 to $2,000,000 range, where they increased 7.3 percent.
The overall Median Sales Price was up 3.3 percent to $590,000.
The property type with the largest price gain was the Single-Family Homes segment, where prices increased 3.7 percent to $665,000.
The price range that tended to sell the quickest was the $250,001 to $500,000 range at 26 days; the price range that tended to sell the slowest was the $5,000,001 and Above range at 114 days.
Market-wide, inventory levels were down 31.8 percent. The property type with the smallest decline was the Condos – Townhomes segment, where they decreased 18.0 percent. That amounts to 1.6 months supply for Single-Family homes and 1.9 months supply for Condos. When Supplies FALL and the Demand Rises, Prices Rise. As you can see, data changes quickly so next month remains to be seen.
Charts are available per your request at no charge. Contact firstname.lastname@example.org. Article provided by SDAR 5/2020