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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

What’s the outlook for vaccine supply?

Chief executives of America’s COVID-19 vaccine makers promised in congressional testimony to deliver the doses promised to the U.S. government by summer. The projections of confidence come after months of supply chain challenges and companies falling short of year-end projections for 2020. What changed? In part, drugmakers that normally compete are now actually helping one another. This has helped solve several supply chain issues, but not all of them.

How has the pandemic changed scientific research?

Over the past year, while some scientists turned their attention to COVID-19 and creating vaccines to fight it, most others had to pause their research — and re-imagine how to do it. Social distancing, limited lab capacity — “It’s less fun, I have to say. Like, for me the big part of the science is discussing the science with other people, getting excited about projects,” said Isabella Rauch, an immunologist at Oregon Health & Science University in Portland. Funding is also a big question for many.

What happened to all of the hazard pay essential workers were getting at the beginning of the pandemic?

Almost a year ago, when the pandemic began, essential workers were hailed as heroes. Back then, many companies gave hazard pay, an extra $2 or so per hour, for coming in to work. That quietly went away for most of them last summer. Without federal action, it’s mostly been up to local governments to create programs and mandates. They’ve helped compensate front-line workers, but they haven’t been perfect. “The solutions are small. They’re piecemeal,” said Molly Kinder at the Brookings Institution’s Metropolitan Policy Program. “You’re seeing these innovative pop-ups because we have failed overall to do something systematically.”

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