| Just the Peaks
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The coronavirus pandemic has dramatically altered Americans’ way of life
Get the rundown on how the real estate industry adapted and overcame
Due to COVID-19-related restrictions, nearly every major industry across the country is struggling to stay afloat. From retail and restaurants to transportation and travel, companies have been forced to halt their operations, rethink their business models, and in some extreme cases, board up altogether. But in an unexpected turn of events, one industry managed to successfully navigate the volatile months of March and April.
Real estate: business as (un)usual?
Apparently, even in times of a global crisis, the need for shelter has not changed.
“The number of people looking to buy a home remains quite high, making it a good seller’s market. What is different are the mechanics of actually making the purchase,” says Karen Scullin of Fox 9 Real Estate. “Home buyers are relying on virtual tours now more than ever, primarily helping to narrow down the possibilities fast.”
In theory, the current stay-at-home orders have compelled homebuyers to speed up what is usually a drawn-out process. Instead of touring multiple homes and neighborhoods, most searches are confined to the web, with realtors providing virtual open houses and one-on-one visits to buyers’ top choices via FaceTime or Zoom.
In certain pockets of the country, home sales were actually up in the month of March. Data compiled in Minnesota showed a 10% year-over-year increase of completed transactions. Like earlier this year, inventory remains low, and on average, sellers received 98% of their initial asking prices. Talk about a clean bill of health!
Controlled chaos
Now, it would be silly to say the coronavirus crisis has had no impact on the residential real estate market. Most industry experts agree that these are unprecedented times we are living in. Seeking control over the situation, people want to project future trends by comparing COVID-19 to the financial crisis of 2008. But that assessment is just too simple.
“Historically low inventory and rock-bottom mortgage rates would normally set the stage for a highly competitive homebuying season,” writes Jeff Andrews of Curbed. “While recessions normally have only a minor effect on the housing market, the coronavirus is making life and markets anything but normal.”
The pandemic in numbers
30+ million Estimated people who have lost their jobs or have been furloughed since COVID-19 hit
$320,000 National median home price, which has held steady for the past 6 weeks
0.3% Year-over-year increase in median home list price for the week ending April 18th
38% Buyers who say they are waiting for health and economic situations to improve (before buying)
42% Year-over-year decrease in new home listings for the week ending April 18th
**For more relevant residential real estate stats, visit Realtor.com
Figures related to the pandemic’s impact on U.S. real estate are quite promising. Yes, activity has significantly slowed, and the number of new houses hitting the market is down. But looking at the entire picture, there’s much to celebrate.
“Rates are down to around 3.8 percent. That number has held steady throughout the pandemic,” says Andrews. “So it’s an open question whether mortgage lenders are willing to go lower, regardless of whether the Federal Reserve cuts its targets again.”
Even if growth has stalled, home list prices were also up since last year during the month of April. The seller’s market remains strong, with high median sale prices and the majority of buyers still moving ahead with purchases according to Realtor.com. Once the quarantine lifts, the remaining 42% of would-be buyers will come out of hibernation. That pent-up demand could result in a bit of a boom in May, June and beyond.
What about right now?
For the time being—what’s keeping business alive? What’s the state of the homebuying scene? Two words: technology and adaptation.
Realtors have really stepped up to the plate to help buyers and sellers move forward despite social distancing measures and other obstacles. Check out the top 3 ways COVID-19 is redefining the real estate landscape in 2020.
3 Factors for Buying or Selling in the Age of Coronavirus
- Virtual Open Houses – Instead of in-person walkthroughs, realtors are turning to technology to showcase properties. If you’re looking to sell or buy, inquire about a video tour. Today’s top agents are using Facebook, FaceTime, Zoom and other technologies to give parties an up close and personal visit.
- Paperwork in the Cloud – During the COVID-19 pandemic, closings have undergone a radical makeover. Since people can’t meet in person, they are drafting contracts, providing e-signatures, and finishing deals via DocuSign et al. The company told CNBC that since the start of the pandemic, they’ve seen no slowdown among real estate users.
- Coronavirus Clauses – Even though deals are still going through, agents are adding special addendums to purchase agreements in order to protect the interests of buyers and sellers. Coronavirus clauses may allow for more flexibility, extended deadlines, and other allowances during these uncertain times.
Everest says: we will get buy 🙂