The National Association of Realtors released its latest existing-home sales data today, and while the news is good, the story it tells is one of a healthy housing market not yet impacted by COVID-19 fears.
Existing-home sales rebounded by 6.5% from last month, and they’re up 7.2% from this time last year. The figure, which counts completed sales of single-family homes, townhomes, condominiums and co-ops, marked its strongest level since February 2007, according to NAR, and is attributable to both pent-up demand and low interest rates.
Though this is the eighth straight month where sales saw a significant increase year over year, February is expected to be the last in that run due to the current slowdown caused by fears over the COVID-19 pandemic.
“These figures show that housing was on a positive trajectory, but the coronavirus has undoubtedly slowed buyer traffic, and it is difficult to predict what short-term effects the pandemic will have on future sales,” NAR Chief Economist Lawrence Yun said in a press release accompanying the data. “Once the social-distancing and quarantine measures are relaxed, we should see this temporary pause evaporate, and will have potential buyers return with the same enthusiasm.”
Despite strong national numbers, the Midwest saw a negligible 0.8% increase in existing-home sales over the last month, though the region did record a 4% year-over-year gain. The Northeast was the only region to see a decline in existing-home sales. But housing costs were up across every region; prices in the Midwest clocked a 7.9% increase from February 2019.
Nationally, the median price for existing homes increased 8% over last year to $270,100. Despite the uncertainty about activity, Yun predicted this monetary figure will hold relatively steady. “Unlike the stock market, home prices are not expected to drop because of the ongoing housing shortage and due to homes getting delisted during this time of crisis,” he said.
In terms of what was available for sale in February, national inventory did rise 5% over last month, but it was down 9.8% from a year ago at this time. Sales happened more quickly than they did at this time last year, with a typical property remaining on the market just 36 days last month, as opposed to the 44 days on market figure in February 2019.
Looking specifically at Chicagoland, Illinois Realtors announced that the nine-county Chicago metro area saw sales of single-family homes and condominiums increase 6.6% from this time last year. The median price in Chicagoland came in at $240,000, a 4.3% boost from February 2019.
While Chicagoland outpaced statewide existing-home sales numbers, the city did not perform quite as well. Chicago’s year-over-year sales activity increased just 1.6% over last year. But prices increased faster in Chicago than they did in the metro area overall, up 6.4% year over year to a median price of $290,000.
In its monthly sales numbers for Chicagoland, RE/MAX saw a 7% increase in year-over-year home sales. The most dramatic increase occurred in DeKalb County, which saw an 18.7% boost from February 2019, followed by DuPage at 16.3% and McHenry at 12.1%. Mirroring Illinois Realtors’ numbers, RE/MAX tallied a 4.3% year-over-year increase in median home prices in Chicagoland. Will and Lake counties led the pack in increases, with 11.9% and 9.3% appreciation respectively. Year-over-year price decreases of 1.1% were seen in both Kendall and Grundy counties.
Geoffrey J.D. Hewings, director of the Regional Economics Applications Laboratory at the University of Illinois, noted that the impact of the coronavirus fears is tough to predict, but that it will definitely start showing up in the numbers next month. “In times past, consumers have become very risk averse when faced with uncertainties about the economy. The difference with the current crisis is the limitations on interactions and fear of infection. This may prove to have a very significant impact on the housing market over the next two to three months,” he said in a press release put out by Illinois Realtors.