Real estate experts confirm: today’s homebuyers cannot be stopped
See how the residential market is faring four months into the COVID-19 crisis

Americans may be staying home, but that doesn’t mean ‘home’ is set in stone.

As we launch into the heart of summer, real estate researchers say industry demand continues to skyrocket, with purchases up 25% in June compared to January and February. Keeping seasonal adjustment in mind, the stat tells us that coronavirus fears have hardly affected market performance. In fact, homebuyers haven’t flinched a bit.

The pandemic: unpacked

Published by Redfin, the latest MLS data reveals an optimistic outlook for brokers, sellers, and hopeful homebuyers. Demand rose for eight consecutive weeks leading up to the beginning of June. And while new properties dropped 21% below last year’s numbers in late May, listings began to recover, down just 15% during the week of June 1st.

Across the board, Redfin CEO Glenn Kelman was pleased with the data.

“Listings accepting an offer improved as well. Two weeks ago, this number was down 11% year-over-year, but for the week of June 1 to June 7, it was 9%,” he wrote in a memo published June 12th. “With demand surging and supply recovering, we expect sales to strengthen. Mortgage purchase applications were up 7% year-over-year in the last week of May and up even more, 13%, in the first week of June.”

Other insiders share Kelman’s confidence, projecting continued upward trends as lockdowns are lifted, unemployment slowly recovers, and the stock market makes its post-pandemic rebound. Many also mention the ‘pandemic within the pandemic’—that is, the current state of civil relations across America, especially in big cities. When it comes to real estate, market experts have assured investors: for now, it’s a nonfactor.

“The past several months have been ones filled with uncertainty, fear, scarcity, and a host of other emotions; all of which had a huge impact on the markets. The stock market tumbled, [and] the real estate market experienced a massive downturn in new inventory and pended transactions,” notes broker Christin J. Hunter. “After months of writing about the uncertainty of the market, it’s a pleasure to share some good news.”

She mentions the addition of 2.5 million new jobs in May, positive gains on Wall Street, as well as upward market trends during the week of June 1st.

Sam Khater, Vice President and Chief Economist at Freddie Mac, adds, “All signs continue to point to a solid recovery in home sales activity heading into the summer as prospective buyers jump back into the market.”

Housing activity across America
A May indicators snapshot

3.91 million*      Units sold
$284,600           Median pric
974,000*           Housing starts
623,000            New home sales
*Seasonally adjusted annual rate
Research provided by the NATIONAL ASSOCIATION OF REALTORS

Moving forward

With extraordinarily low rates driving demand, it seems nothing—not even a global pandemic—can deter buyers. Still, despite positive numbers emerging out of March and April’s ashes, COVID-19 has still made an indelible mark on the real estate industry. Its impact is helping to reshape regional trends, among other noteworthy transformations.

“Even though demand is strong now, no one can say for sure what the long-term outlook is,” concludes Kelman. “The whole reason we’re reporting on demand every week instead of every month is because we have seen such a volatile real estate market.”

As we wait for the dust to settle, consider Kelman’s top 5 takeaways from Redfin’s June real estate forecast.

How has coronavirus affected the housing market?
July 2020 check-in

Buyers remain optimistic
Despite growing public concern over coronavirus hot spots, civil rights protests, destruction of statues and monuments, and other 2020 catastrophes, homebuyers are unfazed. For the majority of realtors, this end of the business is thriving.

Redfin contributor Alec Traub says that such sociopolitical happenings have been a “speed bump…but folks are not batting an eyelash.”

Sellers are apprehensive
While buyers have stayed motivated, sellers—who are historically more careful than buyers—have been reticent to list in the age of coronavirus. Brokers say many have verbally committed to sign, but are waiting to pull the trigger.

“Especially when you live in your house, it’s more difficult to let an open-ended number of people walk through until the home is sold,” says Traub. “I think a lot of people still don’t feel comfortable with that and what that means for their own health.”

Bidding wars abound
The scarcity of listings and surplus of buyers came to a head in recent months, resulting in countless bidding wars. Redfin reports that asking prices were up 10% year-over-year during the first week of June. Sales prices were also up by 3.1%.

“If a property is in a desirable neighborhood, buyers will overpay. Bidding wars, escalations, no inspections, agreement to pay over appraised value, all of that’s becoming the norm,” notes Agent David Palmer. “Anything I’m pricing correctly right now is flying off the shelf.”

3D is in, Zoom is out
While virtual walkthroughs were hot during the early months of the pandemic, brokers have swiftly evolved to meet clients’ changing demands.

With online activity soaring, more and more prospective buyers are requesting three-dimensional scans, which allow them to remotely tour the home at their own pace. Redfin says traffic on their 3D listings rose 42% between April and May, with some markets seeing as high as 25% of all new listings featuring some kind of 3D tour technology.

Suburbia is still hot
Over the past few months, Everest predicted city dwellers’ big suburban migration in response to the pandemic. Now, brokers are confirming many of our suspicions.

“That big migration we’re all expecting, it’s beginning to happen. People are now moving more to the interior of the country. I also have a lot of clients who are retiring and moving down south to more tax-favorable states,” reports realtor Hazel Shakur.

Other experts predict that the shift to remote work, combined with historically low interest rates, will usher in a new boom in home ownership.

Everest says: as the world closes, we’re still closing