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.
COVID-19 Economy FAQs
What’s the latest on the extra COVID-19 unemployment benefits?
As of now, those $600-a-week payments will stop at the end of July. For many, unemployment payments have been a lifeline, but one that is about to end, if nothing changes. The debate over whether or not to extend these benefits continues among lawmakers.
With a spike in the number of COVID-19 cases, are restaurants and bars shutting back down?
The latest jobs report shows that 4.8 million Americans went back to work in June. More than 30% of those job gains were from bars and restaurants. But those industries are in trouble again. For example, because of the steep rise in COVID-19 cases in Texas, Gov. Greg Abbott, a Republican, increased restrictions on restaurant capacities and closed bars. It’s created a logistical nightmare.
Which businesses got Paycheck Protection Program loans?
The numbers are in — well, at least in part. The federal government has released the names of companies that received loans of $150,000 or more through the Paycheck Protection Program.
Some of the companies people are surprised got loans include Kanye West’s fashion line, Yeezy, TGI Fridays and P.F. Chang’s. The companies you might not recognize, particularly some smaller businesses, were able to hire back staff or partially reopen thanks to the loans.
You can find answers to more questions on unemployment benefits and COVID-19 here.
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