“After months of quarantines and working from home, there is a lot of pent-up demand,” Clint Mann, president of Urban Pace, wrote in an email. “Covid-19 put the brakes on the typically robust spring market, and the numbers now point to a strong summer market, which in normal times is slow.”
Weekly home sales in the D.C. region were consistently exceeding 2019 weekly sales until March and reached a low point the week ending April 11, according to the report. Since then, the number of sales has increased, and in the week of May 30, sales surpassed 2019 for the first time since the pandemic began. The number of home sales that week was 2.9 percent higher than the same week in 2019.
The report also found that cumulative sales were just 58 percent of 2019 through the week of April 5 to 11. The increase since brought sales volume up to 74 percent of 2019’s sales by May 30.
After the housing market understandably lost its momentum in March and April, sellers reacted in a variety of ways. Some pulled out of the market, but two clients of Morgan Knull, an associate broker with Re/Max Gateway in Washington, rushed to list their properties for sale out of fear of a repeat of the long real estate recession a decade ago. Knull wrote in an email that he has seen a response in his own business that mirrors the report.
“The market during the past six weeks has been quite fast-paced, maybe even picking up more after Memorial Day, which traditionally marks the beginning of the sleepy summer housing market,” wrote Knull. “By early May, it started to feel more like a normal spring housing market, with flash sales, bidding wars and pre-contract inspections.”
Corey Burr, a senior vice president with TTR Sotheby’s International Realty in Chevy Chase, Md., wrote in an email that he saw the housing market react immediately after Maryland Gov. Larry Hogan relaxed some restrictions in the second week of May.
“After selling nothing from March 15-May 5, my group has sold 15 homes in 40 days,” wrote Burr. “I attribute this to a feeling among buyers that we had gotten to the other side of the virus scare and that the spring market would begin again with all participants simply using proper protective gear when touring properties.”
The number of newly listed homes continues to lag behind 2019, with 55 percent fewer listings between March 29 and May 2, compared to those same five weeks in 2019. However, new listings increased each week last month.
Typically, new listings taper off at the end of May as the summer season begins, but the analysts at Urban Pace expect the summer pattern of slower sales to be delayed this year as buyers and sellers may make up for the spring slowdown. The average sales price has been well above that of 2019 since May 3.
“The strong market snapback has been fueled by 30-year fixed interest rates in the 3 percent range, loan programs with easier qualifications and lower down payment options, and exceptionally low inventory,” wrote Burr.
Burr wrote that the home equity area residents have built up over the past eight to 10 years and the strength of the local economy before the pandemic have also helped fuel the increase in sales. However, he anticipates that many sellers will remain reluctant to go through the selling process until a vaccine for the virus is widely administered, which will continue to limit the number of homes for sale. That limited inventory will keep the market competitive for buyers.
“It’s hard to anticipate what to expect the rest of the year,” wrote Knull. “Right now, I’d say that most buyer and sellers, just like their brokers, are taking it one day at a time.”
Knull remains hopeful that the housing market will hold steady as the rest of the regional economy reopens.
“The fundamentals of the Washington housing market continue to be strong, interest rates are at historic lows and pricing remains high, all of which bodes well for the near-term future,” wrote Mann.