Home sales fell in March, but don’t expect bargain prices

Amy Scott Apr 21, 2020
Home sales are down during COVID-19, but prices aren't. Justin Sullivan/Getty Images

Home sales fell in March, but don’t expect bargain prices

Amy Scott Apr 21, 2020
Home sales are down during COVID-19, but prices aren't. Justin Sullivan/Getty Images

Sales of existing homes fell by 8.5% in March, according to the National Association of Realtors. That’s the biggest monthly drop in more than four years. Sales were down in all four major regions of the country, and especially in the West, where they dropped more than 13%. 

You know what didn’t fall? Prices.

Inventory is low

Nolan Hahn of Denver has a pretty good incentive to buy a house right now: a local program for first-time homebuyers.

“There’s a $20,000 grant for assistance for a down payment if I buy it this year that I’m not eligible for next year,” he said. That’s because he’ll earn too much to qualify after a scheduled raise.

But Hahn isn’t seeing much for sale.

“A lot of the listings have dropped off is what I’ve been told,” he said.

That falling inventory helped push prices up in March. Nationally, the median sale price was up 8% from a year ago.

“Sellers may have been more spooked over COVID-19 than buyers,” said Ralph McLaughlin, chief economist at Haus, a housing finance company. “Home inventory now is about 1.5 million. That’s the lowest for a March on record.”

Shoppers get creative

Since March, more potential buyers have lost jobs and stay-at-home orders have restricted in-person showings. Nancy Vanden Houten, a lead economist at Oxford Economics, expects sales will fall further this month and next, “when they’ll more fully reflect the widespread lockdowns that have been in place throughout the country,” she said.

But people still need to move. And they’re getting creative about it.

David Demres is planning to relocate from Alexandria, Virginia, to Atlanta next month for his job at a software company.

“This was supposed to be the month that I would go meet Realtors, see a bunch of houses and spend a couple weekends there looking at neighborhoods,” he said.

Instead, he’s checking out houses on FaceTime. His real estate agent texted him a video of her driving to one house to show him what the neighborhood looked like.

“That stuff is actually really helpful,” Demres said.

He made a bid on that house over the weekend — under asking price — but his offer was rejected.

COVID-19 Economy FAQs

Are people still waiting for unemployment payments?

Yes. There is no way to know exactly how many people have been waiting for months and are still not getting unemployment, because states do not have a good system in place for tracking that kind of data, according to Andrew Stettner of The Century Foundation. But by his own calculations, only about 60% of people who have applied for benefits are currently receiving them. That means there are millions still waiting. Read more here on what they are doing about it.

Are we going to see another wave of grocery store shortages?

Well, public health officials are warning that we could see a second wave of the virus before the end of the year. And this time retailers want to be prepared if there’s high demand for certain products. But they can’t rely totally on predictive modeling. People’s shopping habits have ebbed and flowed depending on the state of COVID-19 cases or lockdowns. So, grocers are going to have to trust their guts.

What’s going to happen to retailers, especially with the holiday shopping season approaching?

A report out Tuesday from the accounting consultancy BDO USA said 29 big retailers filed for bankruptcy protection through August. And if bankruptcies continue at that pace, the number could rival the bankruptcies of 2010, after the Great Recession. For retailers, the last three months of this year will be even more critical than usual for their survival as they look for some hope around the holidays.

Read More


As a nonprofit news organization, our future depends on listeners like you who believe in the power of public service journalism.

Your investment in Marketplace helps us remain paywall-free and ensures everyone has access to trustworthy, unbiased news and information, regardless of their ability to pay.

Donate today — in any amount — to become a Marketplace Investor. Now more than ever, your commitment makes a difference.

There’s a LOT to celebrate!

It’s National Pumpkin Spice Day, the last day of our fall fundraiser, and thousands of fans like you have invested in Marketplace.

You inspire us, and your support makes us stronger, especially now.