In our reporting about how the novel coronavirus (COVID-19) is impacting Detroit’s housing market, one thing we consistently heard from realtors was that listings have and will dry up. Now there’s hard numbers to confirm that prediction.
The online real estate database Zillow just released a report about the impact of coronavirus on the number of listings and sale prices in the United States. It found that no city’s inventory was affected more than Detroit’s.
The number of listings in Detroit from the beginning to end of March dropped an astounding 61.8 percent—the biggest drop in the country. The average decrease in the 35 biggest markets in the U.S. was 27.1 percent.
Because Detroit has been hit especially hard with COVID-19 cases, combined with Gov. Gretchen Whitmer’s stay-at-home order prohibiting nonessential operations in Michigan, selling homes has gotten much more difficult.
From start to finish, almost every aspect of the homebuying process has been strained by COVID-19. Photographers aren’t allowed to shoot homes, open houses aren’t taking place, banks aren’t issuing construction loans, appraisers don’t enter a house, and moving is a challenge, to name a few of the obstacles. As a result, many real estate agents have encouraged sellers to hold off listing homes until the worst of the crisis is over.
“Since this started, our office has gotten only a handful of phone calls from people interested in listing something,” Ryan Cooley, owner of O’Connor Real Estate, told Curbed Detroit. “In general, I’m advising sellers to wait until the restrictions are lifted and then we’ll get a better idea of the market conditions.”
Typically, the approach of spring is when the market sees a sizable uptick in listings. According to the Zillow report, “[I]n 2018 and 2019, there was an average of 49.9 percent more fresh listings coming onto the market nationwide on April 5 compared to March 1.”
Because the spring buying season is so important for the housing market, a slowdown lasting many months could be a problem.
“It’s tough to know exactly what we’re going to see in the housing market, though I do think it will be affected,” Gabriel Ehrlich, director of the Research Seminar in Quantitative Economics at the University of Michigan, told Curbed Detroit. “But if we enter the spring season—which is primetime for the housing market—still under quarantine, that’ll be pretty terrible news.”