The National Association of Realtors will report existing home sales for last month on Friday. But the critical spring homebuying season is just beginning. About 40% of home sales happen from March through June — at least in a normal year. But COVID-19 is changing the market.
Like everyone else, real estate agents are adapting to a new reality. Lennox Scott runs a brokerage in Seattle, where open houses were recently banned.
“Some listing brokers are now doing virtual open house tours, where they’re online and they’re going to advertise the time that they’re going to do a walkthrough on the house,” Lennox said.
For Denver realtor Dee Ciancio, with LIV Sotheby’s, COVID-19 got very real a couple weeks ago, when one of her fellow brokers tested positive for the disease. He’s OK, but they’ve shut down their office and stopped doing open houses.
“This past Sunday, before we made that decision, I did hold an open house — in a very popular neighborhood in Denver called Stapleton,” Ciancio said. “I counted, and I did have 55 people through.”
That’s a lot of people touching doorknobs and flipping light switches. But it’s also a sign of the strong demand for housing, helped recently by super low interest rates.
The man selling that house is Dan Thomas, a sales representative in the finance industry. After watching his home value rise year after year, he decided it was time to cash in.
“The decision wasn’t made because of the virus, but maybe that was good timing, as well, considering the environment today,” Thomas said.
The house is already under contract for well above asking price. How much will that demand cool off? It’s too soon to tell.
“Right now, at least, the affordability from lower rates is bringing buyers into the market and outweighing the uncertainty of what’s ahead,” said Danielle Hale, chief economist with Realtor.com.
Hale said recent stock market losses are likely to hurt demand for luxury houses.
“You know, if people are a little bit less secure in their job, it’s completely understandable that they might hold back and just wait and see how things go,” she said.
But for those hoping a recession might bring prices down to more affordable levels, Hale says that’s probably not going to happen. What the market really needs is more housing. If the virus and resulting recession slow down building, the shortage could only get worse.
We’re here to help you navigate this changed world and economy.
Our mission at Marketplace is to raise the economic intelligence of the country. It’s a tough task, but it’s never been more important.
In the past year, we’ve seen record unemployment, stimulus bills, and reddit users influencing the stock market. Marketplace helps you understand it all, will fact-based, approachable, and unbiased reporting.
Generous support from listeners and readers is what powers our nonprofit news—and your donation today will help provide this essential service. For just $5/month, you can sustain independent journalism that keeps you and thousands of others informed.