‘Recovery Index’ Measures Housing Industry’s Return
SANTA CLARA, Calif. – COVID-19 and economic headwinds have disrupted U.S. real estate markets – but how much?
Realtor.com created a measurement index to show the pandemic’s impact on the real estate market by metro area. Researchers used data only from listings that appear on realtor.com’s website, but the changes over time can suggest trends in the market. According to realtor.com’s Housing Recovery Index, the housing market continues to recover even in cities experiencing civil unrest.
In addition, the Index includes four Florida metro areas, and each one appears to be weathering the downturn and bouncing back faster than the U.S. average.
According to realtor.com, the proprietary index leverages a weighted average of realtor.com search traffic, median list prices, new listings and median time on market. It then compares those to the January 2020 market trend as a baseline for pre-COVID market growth. The overall index is set to 100 for Feb. 1 in this baseline period as a representation of a “normal” market before the entrance of the COVID-19 virus.
A score of 98, for example, suggests that a metro area is suffering a little bit today; a score of 88 suggests it’s a bit worse. On the other hand, a score of 102 suggests the market has bounced back even more than expected.
For the week ending June 6, the Housing Market Recovery Index was 88.8 nationwide – 11.2 points below the January baseline and up 1.0 point week-to-week. The U.S. market hit a low Index of 83.1 the week of May 2.
In Florida, however, four metro areas, while slowed by the pandemic, did not see as great a drop as the U.S. average.
Florida metro areas’ Housing Recovery Index
- Jacksonville hit a high of 105.6 on March 7 and was 98.0 on June 6 (down 2% compared to Feb. 1 and 7.2% from its high point)
- Miami-Fort Lauderdale-West Palm Beach hit a high of 101.6 on Feb. 6 and was 95.6 on June 6 (down 4.4% compared to Feb. 1 and 5.9% from its high point)
- Orlando-Kissimmee-Sanford hit a high of 104.3 on March 7 and was 88.8 on June 6 (down 11.2% compared to Feb. 1 and 14.9% from its high point)
- Tampa-St. Petersburg-Clearwater hit a high count of 105.3 on March 7 and was 89.9 on June 6 (down 10.1% compared to Feb. 1 and 14.6% from its high point).
“The general sentiment from consumer surveys is that now is not a good time to sell a home because of COVID, economic uncertainty and social unrest, but the data is saying the opposite,” says Danielle Hale, chief economist for realtor.com. “Home prices are back to their pre-COVID pace, and we’re seeing listings spend slightly less time on the market than last week.”
However, “the housing market still needs more sellers in order to meet the surge in demand,” Hale adds. “Looking forward, if we don’t get the inventory we need, we’ll see prices rise even more and homes sell faster later this summer.”
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