7% Decline in Listing Under Contract in April
Among single-family listings there has been a 7% decline in listings under contract between April 1 and May 1. This is the opposite of last year when we saw a 7% increase. Obviously the difference between this year and last year was primarily caused by the COVID-19 pandemic. However we can see that it did not affect all price ranges equally:
The price range under $225K was little affected, being constrained by the lack of supply anyway. The lower mid-range from $225K to $350K did relatively well with almost no decline in 2020. After $350K things get a lot worse. The upper mid-range from $350K to $600K was booming last year with listings under contract gaining a massive 14% during April. This year it dropped 10%. The top end over $600K took a bigger hit, with a drop of 20% in 2020 in contrast to a very healthy gain of 9% in 2019.
This is significant damage but it could have been a lot worse if housing transactions had been curtailed by government edict, as they have in many parts of the world. The overall effect is a drop of only 7% and a large change in the mix. Most of what is under contract is now mid-range with a bias towards the lower mid-range. The higher end of the market (over $350K) is much weaker. This means what is under contract is cheaper on average than it was last month. This is not at all due to prices falling, but due to the significant change in the mix in favor of lower priced homes. The result is that the monthly average and median prices are lower for May then April. Since the average price per sq. ft. also increases as we move up-market, the average price per sq. ft. is also negatively affected by the change in the mix, but not to as great an extent.