Principal just told me he’s not renewing my contract

First year K-5 music teacher. I just had a surprise meeting after school today, HR lady was there, and he said “we just wanted to let you know we decided to not renew your contract. You have a day to let us know if you want to resign instead”. No explanation other than “the principal reserves the right to renew or not renew contacts”. So! What are my chances of getting hired somewhere else and do I need to panic?