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 do I need to know about tax season this year?
Glad you asked! We have a whole separate FAQ section on that. Some quick hits: The deadline has been extended from April 15 to May 17 for individuals. Also, millions of people received unemployment benefits in 2020 — up to $10,200 of which will now be tax-free for those with an adjusted gross income of less than $150,000. And, for those who filed before the American Rescue Plan passed, simply put, you do not need to file an amended return at the moment. Find answers to the rest of your questions here.
How long will it be until the economy is back to normal?
It feels like things are getting better, more and more people getting vaccinated, more businesses opening, but we’re not entirely out of the woods. To illustrate: two recent pieces of news from the Centers for Disease Control. Item 1: The CDC is extending its tenant eviction moratorium to June 30. Item 2: The cruise industry didn’t get what it wanted — restrictions on sailing from U.S. ports will stay in place until November. Very different issues with different stakes, but both point to the fact that the CDC thinks we still have a ways to go before the pandemic is over, according to Dr. Philip Landrigan, who used to work at the CDC and now teaches at Boston College.
How are those COVID relief payments affecting consumers?
Payments started going out within days of President Joe Biden signing the American Rescue Plan, and that’s been a big shot in the arm for consumers, said John Leer at Morning Consult, which polls Americans every day. “Consumer confidence is really on a tear. They are growing more confident at a faster rate than they have following the prior two stimulus packages.” Leer said this time around the checks are bigger and they’re getting out faster. Now, rising confidence is likely to spark more consumer spending. But Lisa Rowan at Forbes Advisor said it’s not clear how much or how fast.
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