Affect on Real Estate Buyers
According to information obtained by the NAR, buyer interest has decreased significantly. On March 9, 78% of realtors reported there had been no change in buyer behavior. Only 16% of those surveyed noticed a decrease in buyers’ interest. However, by March 16, as schools began to close and social distancing guidelines ramped up, nearly half of agents claimed that buyers had become less inclined to purchase residential properties. This may be due in part to the uncertainty of their source of income and also fear of contracting the virus itself.
Affect on Real Estate Sellers
As cases of COVID-19 increased across the country, sellers’ morale was also shaken. NAR’s studies show a clear decline in sellers’ confidence as news about the virus intensified. Although 81% of realtors initially reported that sellers had kept their homes on the market, that number dropped by 20% on March 16. And 16% of agents noted that sellers had decided to pull their homes from the market, marking a 13% increase from March 9.
Considering how quickly the situation has escalated, the NAR’s figures fall short in elucidating the full effect COVID-19 has had on home sellers and the housing inventory.
Around 1,778 properties’ status changed to either permanently or temporarily off the market in January. In February, as dozens of cases began popping up around the country, 3,047 properties were removed. As of March 25, 4,454 homes were taken off the market this month alone. “So, the number of properties taken off the market literally tripled in March when the disease started spreading in New York City,” says one expert.
What We Might Expect From the Future Housing Market
Although there are some closings currently taking place throughout the country, the number of transactions has been greatly diminished by both the virus and orders to stay at home. Appraisers and inspectors have struggled to gain access to homes, and government recording offices have closed their doors, making crucial aspects of the closing process challenging to complete.
Amidst the growing concerns over COVID-19, the housing market has clearly come to an impasse. The spring selling season will not reflect the vitality it has in previous years. Most sellers will choose to hold off before putting their homes on the market, but those who cannot wait will list now and show their homes virtually. While the extreme shift in the industry seems disturbing, the future may not be as bleak as some expect. Some experts believe there will be a really strong push for new properties hitting the market and buyers will come in droves because everyone is now hunkered down and cannot do business. This aspect is going to have a significant effect on the strength of the market once the order is lifted.