The coronavirus is convincing many homebuyers to rethink their plans.
Nearly half of real estate agents reported that home buyer interest has fallen off due to the outbreak of COVID-19, according to a National Association of Realtors flash survey last week of 3,059 realtors. That’s triple from a week earlier when only 16% agents noticed waning buyer interest.
The stocks’ swoon also rattled buyers. According to the survey, 28% of agents said buyers had lost confidence due to the market sell-off, more than double that from the week before at 13%.
“The decline in confidence related to the direction of the economy coupled with unprecedented measures taken to combat the spread of COVID-19, including major social distancing efforts nationwide, are naturally bringing an abundance of caution among buyers and sellers,” said NAR Chief Economist Lawrence Yun.
Sales of previously owned homes did hit a 13-year high in February, NAR found, but Yun noted that milestone occurred in a very different environment than what we see today.
“February is looking at a rearview mirror when the housing market was in a good year,” Yun said. “We are seeing a decline in buyer traffic and homes are getting delisted.”
Sellers are also getting jittery.
Almost a third of agents reported fewer homes listed on the market, while 2 in 5 said sellers had stopped open houses. More than a quarter of agent said their sellers have requested that buyers use hand sanitizer or wash their hands at open houses.
‘Immediate impact from the pandemic’
Real estate agents are also taking precautions for their safety. Some older agents are handing over some responsibilities to younger agents to reduce their COVID-19 exposure.
“Many veteran agents are asking newer agents if they want to step in and help with showings,” said Ambro Mataj, a real estate agent at The Meyers & Venn Team in New York. “Or asking local ones who live close to the listing so commuting is avoided.”
Some real estate agents also reported that their buyers have cancelled flights they booked to check out properties.
“Here in Phoenix/Scottsdale market I’ve noticed a pretty immediate impact from the pandemic,” said Jo Ann Bauer, a real estate agent at The Ozer Group in Arizona. “As a buyer’s agent, I had out-of-state buyers cancel their trip to fly in tomorrow and look at homes.”
To alleviate buyers’ concerns, many agents have opted for virtual showings instead. Yahoo Finance previously reported that major brokerage firm Redfin had mandated that all open houses be cancelled and replaced with private showings, video chat tours, and virtual ones.
“Open houses are being cancelled,” said Shayan Jalali, a real estate agent at Berkshire Hathaway in Boston, “or pushed back because of the virus.”
What about home values?
Still, experts believe that home prices will remain at existing levels, especially due to demand.
“With fewer listings in what’s already a housing shortage environment, home prices are likely to hold steady,” Yun said. “The temporary softening of the real estate market will likely be followed by a strong rebound once the economic ‘quarantine’ is lifted, and it’s crucial that supply is sufficient to meet pent-up demand.”
NAR recently reported that for-sale housing inventory was at lowest level since 1999. As for home-buying during this volatile time, Yun said to buy only if you feel secure.
“If one feels their jobs are very secure, maybe now you would have less buyer competition and better price negotiation,” Yun said. “If a person’s job is not certain, just don’t go home-buying.”