In U.S., Home-Buying Activity Catching Up—and Sometimes Surpassing—Pre-Pandemic Levels - Barron's

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Houses is an affluent neighborhood in Las Colinas, a suburb of Dallas.

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By last week, U.S. home-buying activity rose to about 88.9% of where it was before Covid-19 and the resulting lockdowns disrupted the market, according to new research from realtor.com.

The real estate portal released an index Thursday weighing multiple indicators of supply and demand. They include search traffic on the site, median list prices, new listings and median time on market, and compared those figures across U.S. markets to baselines in January, well before known infections were recorded in the U.S.

More: Sellers—Particularly in the Higher End—Return to Market

The index shows housing activity has increased gradually in recent weeks as more states and localities relax social-distancing rules, and rose a modest 1 point in the week ending Saturday compared to the previous week.

“By combining online search activity along with price and supply dynamics, the index functions as a robust leading indicator of housing activity, and a symptom gauge as we move toward healthier market conditions,” said Javier Vivas director of economic research for realtor.com. Realtor.com is owned by News Corp, which also owns Dow Jones, the publisher of Mansion Global.

The indicators show major variability in how local housing markets are recovering, owing to the different ways states enforced and lifted local lockdowns.

The New York metro area, for example, experienced one of the worst outbreaks in the world with more than 200,000 cases and counting across the five boroughs. That means the recovery is starting from a much lower level than, say, Reno, Nevada, where home tours were allowed to continue in some capacity throughout the crisis.

As a result, the New York metro area, which includes northern New Jersey, saw its recovery index jump 4.9 points in the week ending Saturday compared to the prior week. Stay-at-home orders in the five boroughs, however, still make it virtually impossible to show homes live. Chicago is also seeing a bigger rebound, with its metrics rising 4.7 points.

In Minneapolis, one of several U.S. cities where large-scale demonstrations have occurred in the past two weeks over the killing of George Floyd by a police officer, home-buying activity was basically unchanged from the week before. Same goes for Los Angeles. Overall, 11 metro areas where protests have occurred still saw slight increases in market activity over the past week, according to the report.

Meanwhile, areas that reopened quickly have seen setbacks in housing recovery after an initial bump. For instance, indexes for Dallas and Louisville, Kentucky, fell two points or more in the week ending Saturday compared to the previous week.

At the national level, new listings, asking prices and total active listings have begun to catch up with or have surpassed pre-pandemic levels. Median asking prices are higher than a year ago in 89 out of 100 metro areas.

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Sellers are slowly getting back into the market. New listings, which fell off a cliff in the wake of shutdowns, have creeped back up. Nationwide, new listings were down 21% in the week ending Saturday compared to last year. That’s an improvement over early May, when weekly new listings were down 30% from a year ago.

“The general sentiment from consumer surveys is that now is not a good time to sell a home because of Covid, economic uncertainty and social unrest, but the data is saying the opposite,” said Danielle Hale chief economist for realtor.com. “Looking forward, if we don’t get the inventory we need, we’ll see prices rise even more and homes sell faster later this summer.”

This article originally appeared on Mansion Global.

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