HOW REAL ESTATE HAS BEEN AFFECTED BY THE CORONAVIRUS
Written by Steve Gardner, Realtor for Coldwell Banker
It was supposed to be the typical spring boom for real estate. But thanks to the coronavirus pandemic and subsequent economic downturn, what was expected to be a thriving sales season has hit an unprecedented bump in the road.
Before Coronavirus - it was a good year.
According to the Multiple Listing Service of Greater Cincinnati (MLS) which monitors market activity, the number of SOLD properties in January and February were up by approximately 8% over last year. Anyone who bought a house earlier this year can tell you how competitive the market was and how quickly houses were selling. That was largely due to low interest rates, a robust economy and low inventory - which creates demand for new listings. Priced right, many properties were receiving multiple offers and selling for more than asking price. Many buyers were left disappointed after being outbid or unable to act swiftly. It was, by definition, a seller’s market. But that was before COVID-19.
The month of March brought many unpleasant consequences as the pandemic surged and social distancing went into effect. Not being able to personally interact with clients is painful for realtors, who are typically social by nature. Nevertheless, our industry was committed to rethinking how we conduct business to protect the health and safety of our clients and ourselves, while still delivering for the families entrenched in the buying or selling process.
Even with safeguards in place our business relies on employment. As unemployment soared to unprecedented rates, and the employed began feeling less secure, some transactions fell through. With fewer listings hitting the market and social distancing canceling open houses, sales have slowed from 1,265 in the first eighteen days of April 2019 to 925 this year (according to MLS of Greater Cincinnati). Yet, realtors are pouring more time and energy into finding safe ways for our clients to realize their homeownership dreams.
Technology Plays a Bigger Role
When it became clear that agents would lose the opportunity to share personal space during Sunday open houses, realtors scrambled to make the most of their virtual offerings. More than ever, technology has been instrumental in keeping our business moving in a positive direction during this crisis. Virtual home tours, video conferencing, and reliance on social media to connect with prospective buyers and sellers have become necessities. It is critical for agents to adapt and be forward thinking and creative in this climate.
Other notable adjustments included:
· Transaction Times were lengthened to allow for coordination of inspections and loan approvals in a more complicated landscape and with reduced staff.
· COVID-19 Addendums were added to transactions protecting both buyers and sellers in the event of being personally impacted by the virus.
· Minimized attendance at closings and more virtual options were more commonplace.
· Electronic Closing Procedures were creatively established by some lenders (like ours) to allow for closing without an in-person meeting.
· Drive-up Closings have been initiated in some areas of the country.
In short, the old way of doing business is quickly being reinvented. While realtors will always prefer to work face to face, inevitably some of these changes will remain viable options after the pandemic has ended.
Buyers & Sellers
Sellers should consider that many buyers still feel the pain of being out-bid earlier in the year and are still motivated to find the right home. There may be fewer active buyers touring homes today, but those who are pre-qualified and prepared to make offers will still be tempted when the right house hits the market. While sales may not be as competitive as they would be without the pandemic, it won’t stop homes from selling. Will there be as many bidding wars? Probably not. But the homes that are marketed and priced properly will sell, just like they normally would.
Buyers who are engaged and motivated should continue house hunting. Much of your competition has put a hold on house hunting, for now. However, continued low mortgage rates will likely encourage them to hop back into the market later this year. Work closely with your realtor and lender to stay current to the market fluctuations and you will beat the competition to the closing table.
Life on the other side
None of us really knows for sure, but those of us who stay tuned in to the real estate market actually feel pretty good about the near future. The reality is that any buyers or sellers that are waiting now will likely emerge in the coming months when things are more stabilized. Additionally, those who are planning on selling in the summer will also likely be ready. It is quite possible that our typical spring surge could happen in July & August. Stay tuned!
Steve Gardner is a local Cincinnati real estate expert with Coldwell Banker West Shell. His service-oriented approach to helping others is embraced by his clients, friends and acquaintances.
Steve is also the host of The Faces of Cincinnati, which serves to shine a light on the true value of the community, its people!
Contact Steve Gardner at 513-703-7045