THE PACE OF HOME SALES REACHED NEW RECORDS IN FEBRUARY COVID-19 IS LIKELY TO BRING CHALLENGES TO BOTH BUYERS AND SELLERS
In February, before the onset of the severe Covid-19 crisis, the housing market was operating at a record pace. Sellers were continuing to gain more leverage while buyers were benefitting from the low mortgage rates. According to Realtors.com estimates for the speed of the market in February, supply reached 3.3% in combination of the 50 largest markets. Realtor.com arrive at the estimates by determining the ratio of the active listings to closings of home sales. The February pace was, however, recorded as the highest compared to the previous years. The estimates by realtor.com indicated a 0.3% rise in supply over January and a 15.6% drop when compared to February 2019. According to experts, a decrease in a month’s supply figures represents a fast and more seller-friendly housing market as it shows that there are more homes listed for sale as compared to the current rate of home buying. On the other hand, the February month’s drop in supply was an early indication that there would be an occurrence of a future decline in the housing market. This means that housing market experts were already aware of the coming deceleration even before the onset of the Covid-19 pandemic. Another indicator for the future slowdown in the housing market was the drop in supply rate in percentage as compared to the previous year’s February percentage. The 15.6% in months’ supply in February was significantly lower than the 22.6% in January and a 21.3% drop in
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THE POWER IS NOW MAGAZINE | JUNE 2020
