The Housing Market is Hotter in Counties With Fewer Coronavirus Cases Per Capita

Rhea-AI Summary

Pending home sales in U.S. counties with low Covid-19 cases rose 54.1% year over year, outpacing 45.1% growth in high-case counties, as reported by Redfin. The analysis covered 116 U.S. metropolitan areas for the period ending Dec. 1, 2020. New listings grew 20.6% in low-case areas compared to 12.8% in high-case areas. Active listings fell 41.2% in low-case counties. The average sale-to-list price ratio increased to 100.2% in low-case areas. The demand for homes declined in high-case regions, suggesting potential price drops for sellers.

Positive

• Pending home sales increased by 54.1% year over year in low Covid-19 counties.
• New listings saw a year-over-year increase of 20.6% in low-case areas.
• Average sale-to-list price ratio reached 100.2% in counties with low Covid-19 cases.

Negative

• Active listings decreased by 41.2% year over year in low Covid-19 counties.
• Sales growth is lower in high-case counties, indicating potential price reductions.

SEATTLE, Dec. 10, 2020 /PRNewswire/ -- (NASDAQ: RDFN) — Pending home sales rose 54.1% year over year in U.S. counties with low concentrations of Covid-19 cases during the four-week period ending Dec. 1—outpacing the 45.1% growth in counties with high concentrations of Covid-19 cases—according to a new report from Redfin (redfin.com), the technology-powered real estate brokerage.

This is based on an analysis of counties across 116 U.S. metropolitan areas. Redfin defines a high Covid-19 intensity county as a county where coronavirus cases per capita are at least 80% higher than the other counties in this analysis, while a low Covid-19 intensity county is one that ranks in the bottom 20% by cases per capita.

Home sales have been surging across the board due to record-low mortgage rates and a wave of migration fueled by remote work. Places with low concentrations of coronavirus cases have seen especially high sales growth, in part because they've experienced influxes of new residents during the pandemic, according to Redfin Senior Economist Reginald Edwards.

"Many of the counties with fewer coronavirus cases per capita happen to be the same suburban counties that people are moving to during the pandemic. Folks are migrating to these places because the crowded, expensive cities they used to live in no longer have as much to offer, with restaurants, entertainment and workplaces shut down," Edwards said. "The counties with fewer cases per capita are also seeing higher growth in home listings, which is allowing home sales to flourish."

New listings climbed 20.6% year over year in counties with low concentrations of Covid-19 cases during the four-week period ending Dec. 1, compared with 12.8% growth in counties with high concentrations of Covid-19 cases. The gap was even more stark back in April, likely because real estate activity was restricted in many places across the country at the beginning of the pandemic.

Redfin real estate agent Ali Schneider said one of her buyers recently viewed a home that they liked in Danville, CA, but the sellers then took it off the market after just a few weeks because they were worried they would be exposed to the coronavirus.

"They got nervous because so many prospective buyers were scheduling showings. Every day, people were coming through and touching their doorknobs," Schneider said. "Some sellers are very reluctant to let people into their homes during this pandemic, which is why we've seen a lack of new listings here. Plus, not a lot of folks want to put their houses up for sale during the holidays."

Massachusetts Redfin agent Alysandra Nemeth said she thinks new listings have taken a slight hit because people are spending so much time at home during the pandemic.

"A lot of homeowners can't get their kids, dogs, and themselves out of the house for long enough to put their property on the market," she said. "I also know people who are really nervous about having strangers touring their homes during a pandemic. It's tough, because they also know that it's the perfect time to sell—they're going to get top-dollar for their home since there's such a severe inventory shortage and everyone is moving."

Active listings, a measure of housing inventory, fell 41.2% year over year in counties with low concentrations of Covid-19 cases during the four-week period ending Dec. 1—a more severe drop than the 33% decline in counties with high concentrations of Covid-19 cases.

The average sale-to-list price ratio, which measures how close homes are selling to their asking prices, has also been on the rise in places with relatively few Covid-19 cases. It clocked in at 100.2% in counties with low concentrations of Covid-19 cases during the period ending Dec. 1, compared with 98.5% a year earlier. In counties with high concentrations of cases, the ratio stood at 99.1%, versus 98% a year earlier. A value above 100% indicates that homes are selling for more than their listing prices, while a value below 100% means that homes are selling for less.

"We're seeing less demand for homes in places where coronavirus cases are high, which means sellers are more likely to have to drop their prices," Edwards said. "Typically, homes only sell for more than what they're listed for in places where there are bidding wars."

To view the full report, including charts and methodology, please visit: https://www.redfin.com/news/coronavirus-real-estate-market-impact

About Redfin
Redfin (www.redfin.com) is a technology-powered residential real estate company, redefining real estate in the consumer's favor in a commission-driven industry. We do this by integrating every step of the home buying and selling process and pairing our own agents with our own technology, creating a service that is faster, better and costs less. We offer brokerage, iBuying, mortgage, and title services, and we also run the country's #1 real estate brokerage search site, offering a host of online tools to consumers, including the Redfin Estimate. We represent people buying and selling homes in over 90 markets in the United States and Canada. Since our launch in 2006, we have saved our customers over $800 million and we've helped them buy or sell more than 235,000 homes worth more than $115 billion.

For more information or to contact a local Redfin real estate agent, visit www.redfin.com. To learn about housing market trends and download data, visit the Redfin Data Center. To be added to Redfin's press release distribution list, email press@redfin.com. To view Redfin's press center, click here.

 

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SOURCE Redfin

FAQ

What was the increase in pending home sales in counties with low Covid-19 cases?

Pending home sales rose by 54.1% year over year in counties with low Covid-19 cases.

How much did new home listings increase in low Covid-19 counties?

New listings increased by 20.6% in counties with low Covid-19 concentrations during the reported period.

What trend was observed in active listings in low Covid-19 counties?

Active listings fell by 41.2% year over year in counties with low concentrations of Covid-19 cases.

What was the average sale-to-list price ratio in low Covid-19 areas?

The average sale-to-list price ratio in low Covid-19 counties reached 100.2%.

What impact did high Covid-19 case levels have on home sales?

High Covid-19 case levels led to reduced demand, with sellers in those areas likely facing price drops.