Coronavirus cases are back on the rise in the US and reopening plans are being put on hold in many states across the country. Health experts warn that the “worst could be yet to come.” Although we are still in the middle of this health crisis, the US real estate market recovery is well underway already. New data brings us positive signs, although COVID-19 still looms over the housing market.
The Housing Market Recovery Index
In order to track how the US real estate market is holding up in the face of the coronavirus pandemic, experts at Realtor.com created the Housing Market Recovery Index. The index is set to 100 to represent the state of the market in the last week of January 2020. If the index climbs back up to 100 again, it means that the real estate market would have recovered back to its state in January.
For the week ending June 27, the Housing Market Recovery Index was recorded as 95.8 for the US real estate market as a whole. This was a +3.8 week-over-week change for the index.
Breaking Down the Recovery
Realtor.com uses a few other metrics to measure real estate market recovery. Here is how those numbers fared for the week ending June 27 as well as the week-over-week (WoW) changes:
- Housing Demand Growth Index: 119.5 (-1.2 WoW)
- Listing Price Growth Index: 102.6 (+0.6 WoW)
- New Supply Growth Index: 90.0 (+1.6 WoW)
- Pace of Sales Index: 85.9 (+10.7 WoW)
Based on these numbers, we can see a few key real estate market trends:
- Although it dropped WoW, demand for homes for sale has bounced back and it seems COVID-19 has not been able to slow down the hot summer real estate market.
- Listing prices continue to grow, surpassing the benchmark for recovery. This is likely due to the next trend- low supply.
- The New Supply Growth Index remains below the recovery point as housing inventory is still very low.
- The time on the market (represented by the Pace of Sales Index) is also low.
Real Estate Market Recovery for Major US Regions
Realtor.com’s data shows that 12 of the 50 largest markets in the US are experiencing real estate recovery. Leading the way are the:
- Boston real estate market
- San Francisco real estate market
- Seattle real estate market
- Denver real estate market
- Philadelphia real estate market
Looking at the general regions in the US, the West is leading the way in recovery with an index of 103.3. The week ending June 27, the Northeast real estate market passed the benchmark, with an index of 100.7. The South and Midwest real estate markets are also in recovery, with an index of 95 and 93.9 respectively. However, these regions still lag behind the South and the West.
The Summer Real Estate Market 2020 Is in Full Swing
Although much of the spring real estate market suffered due to the coronavirus and stay at home orders, the summer real estate market seems to be active. Although inventory is low and prices are still on the rise, homebuyers have returned and demand is back up. All of the indicators point to a strong, resilient market that may even withstand the second wave of coronavirus cases and quarantines. A housing market crash is not in sight.
If you are planning on entering the summer real estate market 2020 as an investor, remember to practice safe social distancing and to use Mashvisor’s real estate investment tools to safely analyze investment properties for sale from the comfort of your home.
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