John Nugent, chairman of the Houston Association of Realtors
HOUSTON – (Realty News Report) – A significant number of home owners took their homes off the market in March as the coronavirus threat mounted in the latter part of the month.
The Houston Association of Realtors reported 1,496 listings were withdrawn from the Multiple Listing Service last month, part of a national trend reflective of the nation’s retreat from the highly contagious COVID-19.
On a national basis, Redfin reported 28,140 homes were pulled off the market for the week ending March 29. That was a 148 percent increase over the homes withdrawn in the comparable week of 2019.
The pandemic, combined with shocking economic fallout, derailed what had been an exceptionally strong housing market fueled by low interest rates and job growth in Houston.
Even with the downturn at the end of the month, the Houston housing market recorded 7,566 home sales in March, up 8 percent from 6,995 sales in March of 2019.
But Houston’s bull market of home sales is heading for a hiatus. Pending home sales are down 2 percent and the inventory declined to a 3.5-months supply. It’s the first true reversal of Houston’s housing market in years.
Some 17 million Americans have filed unemployment claims in the last three weeks and additional economic decline unfolds daily with business closures and employee furloughs.
A double-whammy is punishing Houston’s economy as it deals with a crash in oil prices, which dipped below $20 a barrel last week before rising to the $25 range this week. Oil company employees are being furloughed and energy companies are slashing billions off their capital spending budgets.
Economist Patrick Jankowski of the Greater Houston Partnership projected that Houston could lose over 150,000 jobs this year. As long as business activity is shut down due to the pandemic, the timetable for a return to normalcy is uncertain.
“What’s about to happen to Houston real estate reminds me of Hurricane Harvey in that we are bracing for impact, but don’t yet know what the full extent on the market will be,” said HAR Chairman John Nugent with RE/MAX Space Center.
Realtors have turned to virtual showings of homes for sale for safety reasons. Open houses are cancelled.
But whether it’s for safety reasons or because of the economic uncertainty, would-be sellers will be drawn to delay from pushing ahead to list and market their houses, according to Ralph McLaughlin, chief economist of Haus. And it’s happening across the nation.
In Denver, 761 listings were withdrawn in March, with 625 of them happening in the last two weeks of the month, according to a report by veteran housing journalist Aldo Svaldi of the Denver Post.
On a national level, the Redfin residential firm reported pending sales fell 42 percent in the last week of the month as the pandemic tightened its grip on the nation’s housing market. Redfin announced this week that it had furloughed 41 percent of its agents and 7 percent its employees were laid off.
The last week of March provided some negative future indicators. On a national basis, pending home sales fell 42 percent from comparable week of 2019, Redfin said. With growing job losses, shelter-in-place orders and virus-related transactional log-jams among home inspectors, appraisers and closing agents, this Spring selling season will be a nightmare.
