This year's early spring has been a bit abnormal!

Ask AI · Little Spring Sunshine: Do Unusual Phenomena Hint When the Housing Market Will Bottom Out?

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These days, the booming Shanghai real estate market has been everywhere. The most talked-about event is the collapse of the Shanghai online signing system.

It happened on Saturday, March 14. Due to an overwhelming number of online signings, the Shanghai second-hand housing online signing system repeatedly crashed upon login.

Real estate agents on-site exclaimed that the market is really hot, even causing the signing system to fail. Soon, this news spread through various agents’ social circles and was widely circulated online.

On that day, Shanghai’s second-hand home transactions were indeed high. The total number of second-hand homes sold reached 1,472, the second-highest daily volume in nearly five years.

Recently, the transaction volume of Shanghai’s second-hand housing market has experienced explosive growth.

In the second week of March, Shanghai’s second-hand home transactions totaled 7,233 units, a 26.69% increase from the first week of March, setting a weekly record since 2021.

As of March 17, Shanghai’s second-hand home transactions for March have already reached 15,799 units. With the late Chinese New Year this year and the initial small spring rebound, this trend suggests that surpassing 30,000 transactions in March is just around the corner.

Besides transaction volume, another data point has attracted attention.

The number of second-hand homes listed for sale in Shanghai is decreasing at an accelerated pace.

Since June last year, the number of listings has been declining, and after January this year, the decline has sped up significantly.

According to CRIC data, as of March 16, the weekly listing volume in Shanghai has decreased by 22.23% compared to June last year. Some homeowners prefer to delist their properties rather than sell at a lower price.

Another direct indicator of Shanghai’s housing market warming is the recently released February second-hand home price index for 70 cities, which shows Shanghai’s index increased by 0.2% month-over-month, ending a period of decline.

Looking at Shanghai’s housing market at this early stage of spring, whether in terms of transaction volume, listings, or prices, all features align with a small spring rebound.

It is arguably the most impressive small spring rebound among all cities this year.

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Many see Shanghai as a bellwether for the national housing market, hoping this substantial warming can spread to other cities.

The quality of small spring rebounds in other cities has also become a focus. Let’s review some data from other cities’ rebounds.

This year’s small spring rebound differs from previous years, showing some unusual phenomena.

The biggest anomaly is in the heat transfer between new and second-hand homes.

This year, the hot market is primarily in second-hand homes.

For example, in Shanghai, second-hand homes, especially those below 3 million yuan (roughly $430,000), are very popular, accounting for over 70% of total second-hand transactions.

Meanwhile, in the first two weeks of March, new home sales in Shanghai were not as hot. The sales volume of new homes decreased by about 44% year-over-year. While the Chinese New Year timing may have influenced this, the heat in the new home market is clearly weaker than in previous years.

This phenomenon is not unique to Shanghai; other cities are experiencing similar trends.

For instance, in Hangzhou, the first 15 days of March saw over 3,600 second-hand homes sold, exceeding the total for February. Conversely, new home sales in Hangzhou during the first two weeks of March decreased by 47% year-over-year.

In Nanjing, second-hand home transactions in the second week of March reached 2,679 units, 6.5 times the number of new homes sold in the same period.

CRIC data indicates that in first- and second-tier cities, the transaction area for new homes in this small spring period has declined compared to 2024 and 2025.

This is a scenario that didn’t occur in previous small spring rebounds.

In past years, the March-April small spring in the housing market would see either new homes heating up first, then transferring heat to second-hand homes, or both markets heating up simultaneously, resulting in a boom for both.

This year, however, the heating and cooling are highly uneven across different city tiers.

In first- and second-tier cities, new home transaction volumes in the first two weeks of March are lower than last year, or even the year before. The second-hand market is booming, especially for lower-priced homes.

In third- and fourth-tier cities, new home sales in the first two weeks of March are better than last year and the year before, but second-hand sales remain flat.

This disparity is also related to the different market dynamics across city tiers.

In key first- and second-tier cities, new homes in the same area are priced much higher than second-hand homes. Buyers, seeking value for money, prefer second-hand homes, leading to a phenomenon of second-hand homes competing for buyers against new homes.

In third- and fourth-tier cities, the mindset of “buy new, not old” still prevails, and the second-hand market is less active. When the market heats up, the first to feel the change are the new home markets.

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This year’s small spring rebound is more complex than previous years.

Although it has only been two weeks since it started, the market trend has already become apparent.

The complexity indicates that the market adjustment will continue for some time. Currently, both transaction volume and prices are recovering, but the stability is still insufficient.

This is evident from the recent February data on the 70-city housing price index and other real estate statistics.

According to the February 70-city housing price index, the number of cities where new residential sales prices increased or remained stable has risen to 17, up from last month.

In terms of second-hand homes, the decline in prices in first-tier cities has narrowed by 0.4% compared to last month, while in second- and third-tier cities, the decline has narrowed by 0.1%.

The pace of price declines is slowing.

With prices slowing their decline, it’s quite an achievement for the second-hand market in first- and second-tier cities to remain hot during this small spring.

Meanwhile, the volume of new home transactions still needs to stabilize further. The key question is whether the heat will transfer to the new home market. If not, many developers may resort to promotional activities after April.

If the heat in the new home market increases in the next two weeks, this year’s small spring rebound will be confirmed.

In February, two key data points showed signs of turning points. These are worth continuous monitoring.

What are these data?

One is the inventory of unsold commercial housing.

At the end of February, the unsold commercial housing area was 79.998 million square meters, with a year-over-year growth rate of only 0.1%, down 1.5% from the end of 2024. This near-stagnant growth indicates that inventory is no longer increasing, and future demand will mainly be from depleting existing stock.

The other is the ratio of new construction area to sales area.

In January and February, new construction area was 50.84 million square meters, and sales area was 92.93 million square meters, with a ratio of 54.7%.

This means that the new construction area is more than half of the sales area, indicating that the supply of new homes is growing much slower than sales.

These two data points are early signals, and their turning points suggest that the market’s volume and prices will gradually respond.

Overall, despite the complexity of this year’s housing market, a bottoming-out is still possible to expect.

Source: Mizhai (ID: MizhaiPlus)