COVID's Impact on Real Estate
Updated: Apr 17, 2020
Understandably, nearly every new conversation starts with "how's the market?" I get it...It's a scary and unpredictable time. Our market has seen nothing but an upward trajectory for the last decade. People are either sticking their head in the sand or predicting home values and sales to take a leap off the proverbial cliff.
Look, I am not going to be that agent on your social media feed telling you nothing has changed in our market. Our entire world and way of living has changed in a span of 2 months. Of course we're gonna feel it in real estate. While no one has a crystal ball...what we do have are the facts (data) and a pulse on our local market and consumers.
Realtracs data from March 2019 to March 2020 of the Nashville and Murfreesboro markets tells us that we are seeing homes sit on the market longer with Murfreesboro has a sharp 81% increase of days on market from this time last year. There were less homes hitting the market this past March but an increase of people closing on properties.
From February 2020 to March 2020 both markets had a healthy increase of closed properties with no dramatic downward shift or swing. There was a 6% to 8% increase of homes pending and, while we would expect to see a much higher increase shifting from winter months to spring, the trend is definitely moving in the right direction.
April numbers will give us much more insight into how our market is holding up.
While buyers and sellers are absolutely still moving forward with their real estate goals, we are not seeing as many buyers in the market as anticipated for Spring. Some sellers are postponing putting their home on the market if their circumstances allow in order to have a large buyer pool. Closings may have a higher potential of either being delayed or called off altogether due to job security and/or new construction delays.
The Nitty Gritty
So, what are we telling our clients? That the landscape has and will be changing in the coming months. Things we know for sure...
Buyers are going to push the envelope a little more than they would a month or two ago. Our market had already started to stabilize allowing buyers and sellers to meet in the middle. Be prepared to negotiate. Don’t take an offer personally. People still need to buy and sell…find that middle ground.
Your agent should be 100% tech savvy. Open houses have been restricted by our associations and brokerage companies. Sellers may not want to open their home to potential contamination. Buyers may not want to risk contamination by viewing. The safest and most effective way to market your home right now is digitally. If your agent is not providing digital ads and digital postcards, professional photographs, 3D floorplans, virtual tours and virtual open houses…you will be 100% behind the curve.
The home buying and selling experience will be creatively different. You will be taking your own vehicle to view homes. Your agent is going to act like you have the literal plague by remaining 6 feet away at all times. They may even wipe every doorknob on their way out. Cooties are real. Sellers may request only the agent tour the home virtually for the clients to mitigate potential contamination. Contract review and negotiating will be taking place 100% over the phone, zoom and by email. Closings will be remote when possible and creative when not.
Delays will inevitably happen in some cases. If we are having to postpone graduations, weddings and even funerals…home buying and selling will be no exception.
The Experts' Opinions
Many of our experts are predicting this pandemic will have a historic "V" cycle in terms of housing impact. This means the drastic and sharp decline of market movement will have a similar drastic and sharp return to normal once pieces of the economy rolls back on track. If restrictions are lessened and progress is made with testing/vaccine availability, the market has a strong potential to be flooded with consumers as we transition from spring to summer.
The predictions are that leisure, hospitality, trade and transportation will be the hardest hit sectors long-term. Unlike the 2007-2008 recession, we are underbuilt. Housing led the last recession. This time, it may lead us out of the impending recession.
My opinion? Take every opinion with not only a grain but a freakin' block of salt. We have never been thru an abrupt stall to the world's economies due to a world wide pandemic. No one has all of the answers nor historical hindsight.
We can all agree that this moment in life is absolutely BANANAS. The uncertainty, stress and massive amounts of "quality family time" would have any normal person doubling their weekly adult beverage budget.
Hang in there. Enjoy your home. Get creative on how you spend your time with your family. Keep in mind one day you will again have far too little time to spend with your loved ones. DIY the crap outta those house projects.
One day (hopefully soon) we will return to our workplaces, local shops, schools and gyms. Our hugs will be longer. Our health will be truly appreciated. And, next time we want to flake on a friend, we'll fully understand the importance of human connection more than the ease of saying no.
As always, if you find yourself in a position to make a move...I would love the opportunity to work with and for you, six feet apart. :-)