As the world nervously watches the spread of COVID-19 (Coronavirus), the pandemic has begun prompting responses from every industry, and nearly every level of organization in the country. So, how has COVID-19 affected the real estate market, especially as we enter what was primed to be an especially hot spring?
Lawrence Yu, chief economist for the National Association of Realtors, had anticipated about 5.5 million sales of previously owned homes this year (an increase from 2019 and 2018).
That's because borrowing costs have plunged to lows never before seen (e.g., an average interest rate of 3.29% on a 30-year fixed-rate mortgage) and the job market is strong. Obviously, though, no one could have foreseen a virus disrupting market conditions at the start of 2020.
But just how disruptive is it? I follow many Realtors across the nation and in the hardest-hit counties in the nation, such as King County, Washington, Realtors are reporting that homes are still being bought and sold like normal. Though there has been the occasional seller canceling an open house or removing a listing entirely, the fact remains that properties are still moving; buyers and sellers understand this market has something to offer for everyone.
Here in Des Moines the market is still thriving. Our listing inventory is low, so we are still seeing a benefit to listing currently. Some listings are even getting multiple offers and selling for over listing price.
Closings, inspections, appraisals, etc have not been affected to hinder the closing process, however this is a fluid situation and I’m staying in contact with lenders, attorneys and closing departments as things change. For now, nearly all closing departments are requiring only the buyers be present (no Realtors, parents, kids, etc) At this exact time, no option for e-signature at closing is possible.
Buyers & Sellers:
* If you want to look at a home, let's arrange a time to go through via FaceTime!
* I am available to consult with you via video conference / FaceTime to discuss your buying and/or selling needs. We can actually have an entire listing appointment without having to be in the house together!
* All offers and contract paperwork can be signed and submitted electronically. I’ve accepted many offers in the last week and everything can be done electronically! * If you currently have your home on the market. Consider leaving doors open and lights on when you have a showing (assuming you feel comfortable having them at all) to help reduce the amount of surfaces that have to be touched. Be sure to sanitize before and after a showing. Again, if you are uncomfortable having people through that is absolutely OK.
Offers are still happening and more homes went into pending then were listed this past week. The most significant impact is the fact that sellers may be less likely to list their homes right now, which could dampen hopes that significantly more inventory would hit the market come spring and alleviate the supply stress. Conditions that make for a fantastic market for both buyers and sellers still exist—crazy low rates and rising home values.
Ultimately, you have to determine what’s right for you as a homebuyer or home seller. My job isn’t to push you into a decision you’re not comfortable with, but rather to provide hyperlocal context that may be lost in the national media coverage. Our market is still thriving. We just may need to make some adjustments to how we do business. This also may change as the weeks go on, but we will get through this.
Of course, the degree and nature of the COVID-19 outbreak may change, and that's why I will continue to provide you with the most up-to-date information possible.
It's important that we listen to the medical professionals who are bearing the brunt of this, working hard to treat the infected, and developing a vaccine. We must all do our part to slow the progression.
My current clients with upcoming closings and active offers, be on the lookout for an email discussing your current situation and what I’m doing to help make sure it all goes as smooth as possible.
Stay calm. Social distance. And know that we will get through this.
Thank you to David Rosen, a Realtor in New York who helped compile the first half of this.