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Home > Coronavirus > Existing home sales declined 8.5% in March as headwinds grew

Existing home sales declined 8.5% in March as headwinds grew

Apr. 21, 2020 by Troy Merkel

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Existing home sales fell to 5.27 million in March, down 8.5% from the 12-month high set in February of 5.76 million. While most economists expected a decline as the economic toll of the coronavirus set in, March was still a strong month. For comparison, existing home sales in March 2019 were 5.23 million as interest rates were rising and affordability was a concern among most homebuyers.

While sales are expected to decline as we hit the prime selling season in residential home real estate, prices are unlikely to follow a similar trajectory. Unlike the Great Recession, existing home inventory is currently at 1.32 million, well below the inventory in 2008, which peaked at 3.29 million in April of that year and did not fall below 2 million until 2012. The data supports this as median home prices on existing sales rose to $280,600, a 3.8% increase over the previous month.

While real estate agents continue to be innovative by leveraging virtual tours, private showings and remote closings, the headwinds facing the housing market are too great.

No matter how much home sellers adapt to social distancing, consumer sentiment, a key element to homebuying, is plummeting as the unemployment numbers continue to skyrocket. April will most certainly end with another decline in sales as the impact of Covid-19 bears its full force on the housing market.

For more information on how the coronavirus is affecting midsize businesses, please visit the RSM Coronavirus Resource Center.

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Filed Under: Coronavirus, Real Estate Tagged With: coronavirus, Covid-19, existing home sales

About Troy Merkel

@troymerkel

Troy Merkel is a Partner and Real Estate Senior Analyst at RSM. He has 15 years of experience in audit and consulting, with a particular emphasis in real estate and financial services reporting, in accordance with US GAAP, IFRS, NCREIF PREA Reporting Standards and income tax basis. He is also an expert in accounting for asset acquisitions and complex leases and specializes in various tax-advantageous, in particular Opportunity Zones and government subsidized deal structures.

In 2018, Troy was selected as a senior analyst in RSM’s cutting edge Industry Eminence Program, which positions its senior analysts to understand, forecast and communicate economic, business and technology trends shaping the industries RSM serves. These senior analysts advise clients on conditions impacting middle market leaders. Troy’s focus is on the real estate industry.

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