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
Are states ready to roll out COVID-19 vaccines?
Claire Hannan, executive director of the nonprofit Association of Immunization Managers, which represents state health officials, said states have been making good progress in their preparations. And we could have several vaccines pretty soon. But states still need more funding, she said. Hannan doesn’t think a lack of additional funding would hold up distribution initially, but it could cause problems down the road. “It’s really worrisome that Congress may not pass funding or that there’s information circulating saying that states don’t need additional funding,” she said.
How is the service industry dealing with the return of coronavirus restrictions?
Without another round of something like the Paycheck Protection Program, which kept a lot of businesses afloat during the pandemic’s early stages, the outlook is bleak for places like restaurants. Some in the San Francisco Bay Area, for example, only got one week of indoor dining back before cases rose and restrictions went back into effect. Restaurant owners are revamping their business models in an effort to survive while waiting to see if they’ll be able to get more aid.
How are hospitals handling the nationwide surge in COVID-19 cases?
As the pandemic surges and more medical professionals themselves are coming down with COVID, nearly 1 in 5 hospitals in the country report having a critical shortage of staff, according to data from the Department of Health and Human Services. One of the knock-on effects of staff shortages is that people who have other medical needs are being asked to wait.
As a nonprofit news organization, our future depends on listeners like you who believe in the power of public service journalism.
Your investment in Marketplace helps us remain paywall-free and ensures everyone has access to trustworthy, unbiased news and information, regardless of their ability to pay.
Donate today — in any amount — to become a Marketplace Investor. Now more than ever, your commitment makes a difference.