Pandemic hits real estate market hard.
Pandemic precipitates sharp plunge in residential and commercial sales
Sales of single-family homes plunged 19 percent in April, ending a ninemonth streak of year-overyear gains as Houston-area buyers and sellers hunkered down despite real estate transactions being considered an essential part of the economy.
“We were bracing for a rough report, and we got it,” John Nugent, chairman of the Houston Association of Realtors, said Wednesday in the group’s monthly report on housing activity throughout the region.
Last week, closings took an even bigger hit, falling 48 percent compared with the same period in 2019, the association said in a new weekly report monitoring the market during the coronavirus pandemic. Buyers closed on 1,341 single-family properties, townhomes and condominiums between May 5 and May 11, down from 2,596 a year earlier.
The downward slide is expected to continue. In addition to the fallout from COVID-19, Houston is contending with a severe oil bust, which is resulting in thousands of jobs cuts.
Late last month, Ted C. Jones, chief economist with Stewart Title, predicted second-quarter homes sales would be off 35 percent and full-year 2020 sales would
fall 25 percent.
Bill Baldwin, owner of Boulevard Realty, was surprised April’s decline wasn’t worse.
“I think most of us are happy that it’s only 19 percent,” he said Tuesday during a weekly video update to agents and clients. “It’s not good, but it’s not nearly as bad as it could have been.”
When stay-home orders took effect in March, sellers took hundreds of properties off the market knowing activity would slow.
Real estate agents continued to keep the market moving by meeting with clients via online platforms and holding virtual open houses. Property listing views on the association's website are up more than 70 percent from a year ago.
Many moved forward with purchases. Buyers closed on 6,199 single-family homes last month at a median price of $251,000, which was up 2.4 percent from a year earlier.
Inventory of single-family homes was down in April as strong demand during the first quarter absorbed housing supply that was never backfilled by new listings, the association said.
Erika Longoria has been looking for a three- or fourbedroom house in Copperfield and nearby neighborhoods on the west side, but she said there’s not been much to chose from. If something comes on the market at a fair price that she likes it sells quickly.
“It used to be I’d call my Realtor frequently and we’d maybe go see three or four homes at a time. Now it’s gotten to the point that I may call him once every three or four months,” said Longoria, 30.
Baldwin said supply is likely to go up and prices may soften, but he hasn’t seen any major price reductions yet. He said existing homes have been selling in Pearland, Sugar Land and Cinco Ranch, as have been new homes.
“There’s a perception new houses are cleaner, safer. They don’t have the same issues an occupied house has,” he said. “So there’s a mindset that newer is better.”
Still, pending sales, an indication of futures closings, fell 17.6 percent in April, according to HAR, which tracks property sales handled through the MLS.
Homes in every pricing category saw sales declines in April, with the steepest drops at the low and high ends of the market.
The volume of townhouse and condominium sales also plunged 37.5 percent in April, with only 376 properties selling. The median price, however, jumped 12.2 percent to $181,750.
Leasing activity handled by local Realtors also slowed. Single-family lease transactions fell 4.1 percent in April from a year earlier and the average rent was off 1.7 percent to $1,765. Townhouse and condominium leases declined 9.5 percent with the average rent down 1.2 percent to $1,565.