If you are a REALTOR®, you may be curious how CORONAVIRUS is affecting the real estate industry.
The National Association of REALTORS® conducted what is considered a “Flash Survey” about the effects of Covid on the industry. More than 3,000 REALTORS® responded to the survey, representing markets across the country. NAR asked questions related to the lower mortgage rates, the stock market decline, buyer interest, and seller behavior. The survey also delved into the commercial market.
Mortgage Rates, the Stock Market & Sellers
For March 16, 85 percent of respondents reported “no change in seller behavior in regard to rates.” And 7 percent reported “an increase in sellers, who can move and finance a home with lower rates,” while 9 percent noted that a seller chose to “remove home from the market and refinance.”
Regarding the lower mortgage rates and the stock market decline, 45 percent of REALTORS® reported that on March 16 (one of the dates analyzed) “there was no notable change in client behavior regarding the stock market and mortgage rate change.”
Are Buyers Buying?
What about the interest of buyers, though? Most REALTORS® count on the business of both buyers and sellers. Here’s what the survey revealed:
- On March 16, 45 percent of REALTORS® in the residential sector reported that there was “no change” in “buyer interest,” 37 percent noted a decrease in interest and only 11 percent reported a significant decrease. Interestingly, 5 percent said that business increased and one percent said that their increase was significant.
- Even in areas where cases of COVID-19 have been reported, REALTORS® reported similar responses. In fact, only 12 percent said that the decrease was significant (41 percent said that they saw a decrease).
Compared to March 9 responses, though, the numbers on March 16 may reflect how the Coronavirus response changed. On March 9, more than 75 percent of respondents reported an increase of business. Keep in mind, though, that in later days, the public was advised to avoid crowds of 50 and then crowds of 10 and these changes could have affected buyer actions.
Taking Inventory of the Inventory
Are there fewer homes on the market and did COVID-19 affect inventory? Here’s what NAR noted in the survey:
- As of March 16, 69 percent of those responding noted “no change” regarding inventory (when reporting “seller behavior”), while one quarter reported a decrease and three percent reported a “significant decrease”.
- Respondents in areas where COVID-19 was suspected or where cases were confirmed revealed similar figures—65 percent said there was “no change.”
- When respondents were asked the same question on March 9, 87 percent reported that inventory hadn’t changed.
Most REALTORS® reported that COVID-19 isn’t affecting buyers to the point of pulling listings. On March 16, more than 60 percent of those responding said that sellers weren’t pulling their listings because of Coronavirus. Only 16 percent said that they had sellers pull listings. About a quarter said that they just didn’t know…so perhaps a seller pulled the listing but gave no explanation.
However, in areas with cases of COVID-19 (or presumed cases), the number of sellers who pulled their listings was a bit higher—20 percent. Still, though, more than half (56 percent) said that the listings remained on the market. Although most sellers are not removing properties from the market, they are changing their behavior about showing them to the public.
Protecting REALTORS, Buyers and Sellers During CORONAVIRUS
Everyone needs to take measures to ensure that the CORONAVIRUS stops spreading. The concern about catching the virus means that REALTORS® need to understand the directives of state/local/federal governments including all CDC recommendations for businesses.
NAR also inquired about any changes that REALTORS® have seen concerning seller behaviors related to precautions for buyers coming into the home. Here’s what was reported:
- 40 percent reported no changes (meaning the seller didn’t cancel open houses, request that buyers wash hands or use sanitizer, request that buyers take off shoes, wear gloves, limit listing presentations, etc.)
- 40 percent said that sellers nixed open houses
- 27 percent noted that sellers requested that potential buyers wash their hands or use hand sanitizer before walking through
- 14 percent either requested that buyers remove their shoes or wear ‘footies’
- 10 percent “restricted listing presentations”
- 6 percent requested that buyers put on protective gloves while in the home
- 11 percent had other guidelines
However, in areas where COVID-19 was confirmed or assumed, 45 percent of respondents said that the seller no longer wanted to hold open houses.
The Coronavirus has, in some way, affected every industry in the country. However, the virus has also affected many on a personal level. A home is a personal sanctuary, and sellers may have requests related to buyer habits while in the home.
Safety is the top priority, and, out of respect for a seller, REALTORS® should strongly encourage that buyers use hand sanitizer before entering a home (REALTORS® should use it too!). While some sellers may request that potential buyers wear gloves or even remove shoes, hand sanitizer should be a first step for everyone before entering and after exiting a home. In addition, REALTORS® should abide by all guidelines issued by the CDC as well as those issued by local and state governments.
Illinois and California issued ‘stay at home’ orders, and, obviously, this affects how buyers look at homes in those states. However, keep in mind that your listings are online. So while foot traffic could decrease, buyers still have a way to look at homes.During this time, amp up the virtual home tours! Take great pictures and give buyers an online showcase of what your listing has to offer. If you can post 360-degree views of rooms, do it! While no one knows what the future holds, we all know that, right now, most of us are working at home and staying away from crowds. This means more screen time. Take advantage of technology and make sure your listings shine online!