What the Pandemic Means If You Want to Sell a Home or Buy One
There's a dark cloud hanging over the spring real estate market
To the growing list of disruptions caused by the coronavirus pandemic, add this one: the housing market. If you’re trying to sell a home or buy one or just think you might list your residence at some point, you’ll need to rethink things.
John Quinn, broker/owner of Quinn Realty Group in Highland, N.Y., had been excited about prospects for the spring real estate market when the year began. His optimism has faded.
“Buyers aren’t dropping out of deals, but they are putting them on hold, at least temporarily,” said Quinn. “If they hadn’t gone into contract yet, they decided to hold off. And those who are in contract are asking for new terms. This pandemic has created a whole new wrench in the marketplace.”
That’s an understatement.
“I was selling to follow a dream of getting a camper van and traveling, but I’m waffling.”
The Slide in Home Buyer Interest
In an April 5-6, 2020 survey by the National Association of Realtors, 90% of members said buyer interest has declined since the coronavirus outbreak. Also, 59% said buyers are delaying home purchases for a couple of months and 57% said sellers are delaying home sales for a couple of months.
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Homes that are on the market are often just sitting there. According to Zillow, the inventory of listed homes is up about 2.5% overall since March 1. And, according to The Wall Street Journal, the number of new listings on Zillow since March 1 has plunged in COVID-19 hotspots like Detroit (62%) and New York City (49%).
Under the circumstances, Philadelphia’s Brenda Lange, 60, is struggling with what to do about putting her home on the market.
“I was selling to follow a dream of getting a camper van and traveling, but I’m waffling,” said Lange, who owns a 100-year-old, two-bedroom house. “I’m probably going to stay put for a few more months. My agent told me that when this passes, there is going to be a surge of homebuying. Especially if the interest rate stays so low.”
Waffling About Whether to Put Out a 'For Sale' Sign
I’m in a similar situation. I’m 54, my three children have flown the coop and I’ve downsized about 20 years’ worth of stuff in my two-family Hudson Valley, N.Y. home. Like Lange, I was also just about to put that “For Sale” sign on the front lawn when the pandemic basically stopped the world.
I need to find a buyer because I need the financial cushion. But like Lange, I’m waffling.
For sellers, the short-term outlook isn’t good.
“Home sales will decline this spring because of unique economic and social consequences resulting from the coronavirus outbreak,” said National Association of Realtors Chief Economist Lawrence Yun.
Some prospective sellers — especially those nearing or in retirement — are hopeful they can finalize their relocation plans, despite the pandemic.
"As a seller now, the downside is that you’ll probably see fewer buyers."
"I have been planning to move to Sarasota, Florida for more than a year,” said Sandra Gurvis, 69, who’s eager to sell her two-bedroom, two-bath Columbus, Ohio condo. “Why would I let this stop me?”
But Jeff Tucker, an economist with Zillow, says many buyers and sellers will just wait to see how this all plays out.
“As a seller now, the downside is that you’ll probably see fewer buyers. But you’ll have less competition from other sellers,” he said. “Zillow had a twenty percent drop in people looking at listings in March.”
Tucker was surprised that the buyer falloff wasn’t larger. “There are still those who are looking for deals,” he noted.
His advice for sellers: “If you don’t get any buyers, you can always try again later. But there might be a wave of listings this fall, and you’ll suddenly have a lot of competition.”
The Outlook for Home Prices
And as for home prices…
Some 63% of National Association of Realtors members surveyed said buyers are expecting a decline in home prices because they sense less competition.
“I expect to see at least a temporary dip in sale prices during the pandemic,” said Tucker.
If you just have to sell your home, you’ll need to make technology your friend.
“The number of sellers who are posting 3-D tours of their home [online] has tripled,” said Tucker. Redfin reported a 494% increase in requests for agent-led video home tours as of March 20.
Once prospects show an interest due to their virtual walkthroughs, real estate agents can then arrange for individualized in-person versions. For now, Open Houses with a flock of potential buyers arriving simultaneously are pretty much out.
Going Virtual for Home Inspections and Closings
Other parts of the home-buying and home-selling process need to be done virtually, too.
“The regulatory part of selling a home has seen some loosening of the restrictions,” Tucker noted. “We’ve heard of inspectors checking out a house for a buyer via a video tour, through FaceTime or Skype.”
Paperwork for closings and mortgages are being handled through mail or email rather than face-to-face meetings.
Sherry Paprocki and her husband, Ray, both 61, are resorting to using the U.S. Postal Service to finish up selling their 1,200-square foot condo in downtown Columbus, Ohio. They got a pre-pandemic offer from a buyer who saw the place in 2019 before the couple took it off the market.
Once the sale is complete, the Paprockis hope to become buyers.
“We’ve lived in a high-rise condo for five years and now know that we’d like to be away from the city center and have a yard of our own again,” said Sherry. “However, the virus situation made us completely rethink where our temporary quarters would be while we decide on the next home.”
As for me, I’ve decided to move forward and try to sell my home. I’m nervous, but hopeful.
Quinn’s hopeful too, as real estate brokers typically are.
“I do think the market will be super strong once we come out of the other side of this, especially with the interest rates so low. And there are some buyers who are motivated now,” he said. “They might have accepted a job in the seller’s area or retired and are moving.”