The housing market showed early signs of recovery in May as the addition of homes for sale and contracts to buy homes both increased dramatically from April levels, according to a report from tech-powered real estate brokerage Redfin.
“Although the housing market was still mostly stalled in May, it’s worth noting that homes under contract to be sold jumped 33% between April and May after two consecutive months of decline,” said Redfin lead economist Taylor Marr. “This is a key leading indicator for home sales in June and July. New listings of homes for sale have also likely passed their bottom, but are still about 20% below February’s level, so there’s still a ways to go before the housing market has recouped the lost activity of the past few months during the shutdowns.”
Overall home sales in May fell 30.8% from a year ago, but the most expensive metro areas saw more dramatic decreases in home sales than the national drop. The 12 metro areas with median prices above $450,000 (seven of which are in California) saw home sales decline between 38% and 58% from a year earlier. San Francisco and San Jose, California, which both have median prices above $1 million, saw home sales drop more than 55%.
Home sales fell 11.7% nationwide from April on a seasonally-adjusted basis, an improvement from the March to April drop of 21.5%, which was the largest decline on Redfin’s record.
The national count of active listings of homes for sale fell 21.2% year-over-year in May. This is the ninth straight month of declines. The 0.5% increase in the nationwide number of homes for sale between April and May represents a gain of fewer than 9,000 homes for sale during the month. None of the 85 largest metros tracked by Redfin posted a year-over-year increase in the count of seasonally-adjusted active listings of homes for sale.
The number of new listings fell 21.5% compared with a year earlier, but surged 35.6% from the all-time low seen in April. This is a sign that some balance may be returning to the market after the past few months of declining homes for sale and increasing homebuyer demand led to intense competition and bidding wars in some places, the company said.
