Among the many unknowns of the COVID-19 lockdown’s effects on the real estate market was the impact on list price. Some wondered whether the impact on employment and affected industries would cause a decline in asking price for homes listed after March. The data suggests otherwise.
In markets across the country, sellers are back to pre-crisis era asking price appreciation of 3-6% over 2019 levels. In Boston, Chicago, and New York sellers cut asking price by nearly 9% during the 4 weeks following the declaration of national emergency on March 13th but quickly returned to their pre-crisis appreciation expectation by May.
Looking at late May listings, one can detect the beginnings of significant increases in list price over 2019, with Boston (MLSPIN) being an outlier in this regard. These markets are all experiencing a shortage of listings exacerbated by weak new listing activity in March and April. Demand, as expressed by showing activity, has resumed or surpassed 2019 levels in most markets. Its reasonable to expect that sellers in inventory-constrained markets will keep ratcheting up asking price. For desirable homes, they will likely get their price.
Year over year median new listing price appreciation for residential properties in various MLS’s.
Data courtesy of MLSPIN, MRED, OneKey, ARMLS, UtahRealEstate, and WIREX.