Accepted Offers Plummet
The best current indicator of market activity I can find is the number of properties receiving accepted offers week by week. With all the uncertainties currently, it would be reasonable to expect the pace of sales to drop. Let’s see if that has happened.
This chart compares the number of SFHs receiving accepted offers week by week in 2019 and 2020 in the 34 cities and towns of Essex County (I have used Essex County to get a large enough sample to be significant.)
2019: week 1 is week ending January 11; week 13 ending April 5
2020: week 1 is week ending January 10; week 13 ending April 3
For the first 9 weeks of the year – through March 6, 2020 (March 8, 2019) – the number of accepted offers was slightly ahead in 2020: averaging 91 vs 87 in 2019.
The number of accepted offers then started to drop: by 15, then 19, then 21 – and finally this past week by 72 (there may be a few late reports of offers accepted last Friday in which case I will update the numbers reported here.)
April traditionally sees an uptick in market activity – the “spring market”. In 2019, the weekly average – even allowing for a drop in Holy Week (week 16)- in the four full weeks of April was 146 accepted offers.
Adding to the economic uncertainty is the challenge of viewing properties. It seems likely, therefore, that the number of accepted offers will continue to trail well below last year’s levels. Perhaps the biggest surprise is that it took until this last week for the drop to start in earnest.
While activity will drop, it is not clear what the impact will be on prices. I suspect that will be a case-by-case situation depending upon the specific circumstances of sellers.
As with the economy at large, the housing market entered this shutdown from a position of strength: a chronic shortage of supply and low mortgage rates. The best outcome might be a resetting of the supply/demand imbalance creating a stable market.
Market Analyst | Team Harborside | teamharborside.com
Sagan Harborside Sotheby’s International Realty
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