Housing Impact and Changing Practices

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BROKERAGE / CORONAVIRUS DISEASE 2019

COVID-19 is sweeping the nation. Things are changing rapidly, and there’s no doubt the real estate market will be impacted, as will current practices. Here’s what we found.

There’s no doubt that the coronavirus disease 2019 (COVID-19) is on everyone’s mind. And, it will impact housing, if only to make real estate professionals more deliberate in their interactions with others. REAL Trends spoke to brokers from around the country to see how this pandemic is impacting their markets. Mind you: A lot can change even in a day.

Right now, most real estate markets have not seen a significant impact from the virus. April numbers may be down slightly, but the true impact will be felt in May. According to Florida-based broker Dewey Mitchell, “So far we have not experienced any noticeable impact from the virus. Our numbers are up year over year. Admittedly, we are expecting the fallout from the events of recent days.” Ohio-based broker Mark Meinhardt says, “Houses under $500,000 are still a hot commodity here in Cincinnati. I know of one deal this week for $1.6 million, which is very high for our market, where the buyer backed out as his stock portfolio dropped. Not much other negative at this point. It’s still early.”

A less-traditional brokerage firm, House Buyers of America, believes that the spring season will be a success despite the fears. “Business owners and home shoppers can see a global outbreak like coronavirus as a significant threat that brings fears of a market slowdown with it,” said Nick Ron, CEO of House Buyers of America. “If anything, we see the opposite–and nothing but opportunity ahead. The spring market is off to a white-hot start. We’re seeing an increase in bidding wars and larger numbers of aggressive offers to beat out the competition. Many sellers are removing home inspection contingencies to drive faster sales.”

Office Ghost Towns

Where it has seemed to impact brokerages is in their offices. “Our offices are like ghost towns. No one is coming in,” says California-based broker Marian Benton. Same for Pennsylvania-based Jack Fry, “We did allow our duty agents to work remotely and not have to come into our office. We’re still doing our continuing education class, which is a large group. We’re watching what our local government is posting and following its suggestions.”

However, in harder-hit areas like Seattle, the impacts on the market are already being felt. According to Washington-based broker Kim Piper, “We see impacts on the industry and marketplace in our Seattle market, but not in the balance of the State. Since we already have scarce inventory and so little affordable housing, we don’t believe that the COVID-19 issues will impact activity in the long run, but what we’re seeing is a pause, as if everyone is holding their breath and waiting for what’s going to happen next.”

She notes that she’s seen reports from listing brokers that vulnerable or anxious sellers are delaying bringing homes to market or canceling listings because they don’t want strangers in their home, or they’re asking for virtual showings only. “We’ve had a couple of reports that listings have been delayed because sellers were downsizing and moving into assisted living or communal retirement communities. Now, with the fear of the virus, they’re electing to wait. Buyers are still anxious to purchase. And, with the interest rate reduction, they’re even more eager.”

Preparation is Key

Any broker who’s been through the downturn of 2007-2009, knows the value of being prepared. Piper is actively developing an emergency plan should the market be impacted further. “We’re working on scenarios to adapt and respond if our workforce becomes unable or unwilling to staff our offices. We may be closing or limiting access to our offices. We will maximize the use of our already-robust paper-less, virtual full-service offering to our 10 locations and still fully support the agents in the field,” says Piper. “We use fully paperless transaction management, review, and oversight system. We haven’t processed a commission check in years, escrow wires funds, and we distribute to agents via EFT. Meetings, workshops, and training us on video and available live or via our internal intranet later. The systems that we put into place during the downturn, and have since improved and perfected, so that we could financially survive and ultimately thrive are invaluable now!”

Showing Time set up a new website to show showing activity and the impacts of the coronavirus. The site will be updated daily. “As you know, we track and report on buyer activity across the U.S. and release a Showing Index around the 20th of each month, but due to requests from our customers, we will begin reporting weekly results in 100 key U.S. markets to provide relevant information on the impact of the coronavirus,” according to Showing Time. To visit the website, go to https://www.showingtime.com/impact-of-coronavirus/

For now, brokers would be smart to implement plans ensuring the safety of their agents, employees, and consumers. The National Association of Realtors recently released coronavirus guidance regarding fair housing, open houses, showing properties, and more. The Appraisal Foundation also released advice based on the virus’ impact on appraisers.

REAL Trends wants to hear from you during this national crisis. Please email Editor in Chief of Content Tracey Velt with an update on how your market is faring during this crisis. How do you see real estate changing because of COVID-19? Email: Tvelt@realtrends.com.

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This article originally appeared in the April 2020 issue of the REAL Trends Newsletter. It is reprinted with permission of REAL Trends, Inc. Copyright © 2020. To read the rest of this issue & more, please visit our Real Trends page online.

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