As recently as February, the future looked bright for the nation's housing market, according to Zillow. Housing supply was low, buyer demand was on the upswing, and year-over-year home values were rising after a relatively flat 2019. Then the coronavirus pandemic hit the United States, and residential real estate — along with the general economy — hit the skids. At its nadir in April, new listings had fallen by more than 50% year over year, based on data from Redfin. Despite the downturn, Americans are still buying and selling homes. But like so many other industries, real estate has had to adapt.
Wear PPE, Please
According to a National Board of Realtors survey published May 22, three-quarters of respondents said they are now using personal protective equipment such as masks, gloves, and shoe covers, as well as following social-distancing guidelines when they view or show a property. More than half of home inspectors and appraisers surveyed said they are doing the same thing.
"Most agents I know are providing gear like booties plus disposal bins," says Kenny Young, an agent with Realty Texas in Round Rock, a suburb of Austin. "I also carry a package of them in my car just in case. Everyone is required to wear masks, and in some cases people are asking us to also wear gloves."
Showing a vacant house poses fewer challenges than one that is occupied, Young says. Agents are also telling homeowners to leave open doors, closets, and cabinets so visitors can look inside without having to touch handles and knobs; leaving all the house lights on; and thoroughly cleaning countertops, door handles, and other frequently touched objects before and after a showing. Ample hand sanitizer is a must. "We're putting it in two, maybe three different rooms of the house," he says.
No More Open Houses
Some homeowners are also trying to limit possible exposure to COVID-19 by reducing unnecessary foot traffic. In some cases, that means requiring prospective buyers to present a letter of preapproval from a lender before being allowed to view the property in person, Young says. "That's a big change from before the pandemic outbreak."
A majority of home sellers — about two-thirds of those surveyed by the National Board of Realtors — are not allowing open houses. Furthermore, a quarter of respondents said they're not conducting in-person viewings at all. Instead, they are relying on virtual showings, where agents will guide clients through the home using FaceTime or a similar video app.
Unlike traditional online real estate videos, which are shot and edited professionally to make a house look its best, a virtual tour puts the buyer in charge. "A normal online video doesn't let you look down, up, sideways at your leisure," Young says. "We start from the outside, showing them the street view, what's across the street, then literally walking them through the entire house and letting them ask questions as they need to."
Related: Tips From a First-Time Homebuyer
After the buyer has seen several homes virtually and settled on one house, an in-person tour can be arranged prior to making an offer. Some states, such as Texas, allow buyer and seller to conduct the closing virtually or via mobile notary service. At the very minimum, experts say, expect in-person closings to adhere to social-distancing guidelines and limit the number of people present.
Expect Delays
Not surprisingly, houses are taking longer to sell — about two weeks longer on average, year over year, according to weekly data published May 21 by Realtor.com. Since the onset of the pandemic, both new and total active listings are down compared with the same period in 2019, and many Americans have postponed plans to buy, according to the NBR survey.
"The pandemic is clearly having a negative impact on home sales from the precaution among buyers and also some sellers just not wanting to put their homes on the market. They want an all-clear, reopening of the economy before listing," Lawrence Yun, chief economist with the National Association of Realtors, told WAMU, a public radio station in Washington.
The coronavirus pandemic is also having a lesser impact on closings, according to the survey, with 30% of members experiencing delays due to financing issues. Nearly as many Realtors (28%) said buyers have had to pull out due to job loss.
Be Cautiously Optimistic
Surprisingly, home prices seem to be holding steady; supply and demand have decreased in tandem. The weekly Realtor.com report shows median listing prices for the first three weeks of May up about 1.5% year over year. A May 14 analysis by Redfin is even more optimistic about the state of the market, showing a 5.4% increase year over year. And don't forget, mortgage rates are at historic lows.
But whether that trend will continue — and whether buyers will ultimately pay what sellers are asking — is anyone's guess. Analysts at Zillow are cautious in their outlook. They project that housing prices will fall 2% to 3% by October before slowly recovering in 2021 to pre-pandemic levels. And demand isn't the same everywhere.
Don't Neglect Time-Tested Advice
No matter what the economic climate, experts say, some things about the buying and selling process remain the same. For sellers, that means getting your home in show-worthy condition by making necessary repairs and upgrades, decluttering and removing personal objects for staging, and being open to negotiation on the selling price. For buyers, that means having all your finances in order, including mortgage preapproval, and arranging for a home inspection as soon as an offer is made.
