New listings of high-end homes dropped the farthest and fastest when the coronavirus pandemic hit the U.S., while affordable listings were less affected, a new Zillow analysis shows.
But as new listings have increased in recent weeks in response to strong buyer demand, more high-end homes are coming onto the market than any other type.
New listings of the most-expensive homes - the top fifth of the market - were the first to drop off and fell below last year's rate before homes in other price tiers. Expensive homes also had the steepest fall of any price tier, dropping 51.4% below last year by mid-April. Meanwhile, listings of the most-affordable homes - where there typically is the tightest inventory - have fallen 32.1% year over year at their lowest point.
The number of new for-sale listings overall has shown improvement, up 5.9% last week from the previous week. New listings of the most-expensive homes - after dropping the most in March - are now seeing the biggest resurgence, up 8%. The uptick is likely a sign sellers are feeling more confident because of improving buyer demand, as newly pending sales have also jumped up during the same period.
The split in listing behavior by price likely has to do with the reasons sellers typically list them for sale. Younger sellers, who tend to sell less-expensive homes, typically face more urgency when selling - they're more likely to have a job change or new child that prompts a desire to movei. Sellers with higher-priced homes may have more flexibility in their decision, leading many to take a wait-and-see approach in the early days of the pandemic.
"Many sellers with the flexibility to delay or temporarily remove listings have opted to do so, perhaps waiting out the uncertainty. Now that more buyers are in the market, those sellers are wading back in, joining those who had remained motivated to sell for any number of life reasons and adapted with virtual tools and social distancing," said Skylar Olsen, senior principal economist at Zillow. "We have not yet seen prices affected, though we expect them to fall modestly on a national level as the pandemic plays out."
Despite recent increases, the current rate of new listings is more typical of mid-December than the spring - usually the busiest time of the year for home shopping. Total inventory remains low as more homes are selling than in early April. Total inventory is down 16.7% year over year - the biggest yearly drop since the pandemic began in the U.S. - and down 1.6% weekly as of the seven days ending May 3.