In the not so distant past, Seattle
open houses were packed with
home buyers eagerly poking their heads in closets, perusing spec sheets,
munching on snacks, and offering bids above asking price in this
ultracompetitive market.
Then on Jan. 20, a Washington state resident
became the first confirmed case of the coronavirus in the U.S.—and slowly but
surely, everything changed.
According to Seattle-based real estate agents,
open houses are now significantly more guarded affairs, and some have been
canceled outright. Attendance of the open houses that are still
taking place has been noticeably lighter than it has been traditionally, and
attendees seem to be less interactive—most are doing their best to keep their
distance from one another, and don't dare crack open a closet or touch a
countertop without clenching an antiseptic wipe.
"We are seeing a lot more hand sanitizer
and Clorox wipes at open houses," says Wes Jones managing
broker with Keller Williams in the Seattle suburb of Bellevue, WA. "We
also make sure to wipe down the front door handle a number of times throughout
the open house. It also appears that not shaking hands at all is quickly becoming
acceptable."
Meanwhile, more home sellers leery of the
potential health risk of strangers at their open houses are refusing to host
them.
"We did have one client decide not to
have us continue with their public open houses," Jones says. "We will
continue to show their property by appointment only."
He's also seen more home buyers pulling out of
the market and putting their searches on hold for now. But "the worst-case
scenario is that we go from a really hot market to a more normal market,"
he says of Seattle.
"I am not naive enough to believe that
the overall economy may not be impacted short term by this scare," he
continues. "What could happen next? That remains to be seen."
How the coronavirus is
changing how people sell homes
Welcome to the reality of selling a home in
the era of the coronavirus. Anxieties abound, not only about catching the virus
that causes COVID-19, but also the volatile stock market, the shaky economy,
and general fears of a coming recession—all of which could plunge the U.S. real
estate market into a forced hibernation right when it's supposed to leap into
overdrive this spring.
While Washington state may be coronavirus
ground zero with the earliest known cases, and some of the highest levels of
infection in the U.S., (according to the Centers
for Disease Control),
the panic is being felt nationwide by real estate agents who've noticed a
drop-off in the number of home buyers and sellers willing to mingle and make a
deal.
“The coronavirus is leading to fewer home
buyers searching in the marketplace, as well as some listings being
delayed," says Lawrence Yun, chief economist for the National
Association of Realtors®. "In the latest flash survey, 11% of Realtors
indicated a reduction in buyer traffic and 7% are reporting lower seller
traffic when asked directly about the coronavirus impact on the market. The
stock market crash is no doubt raising economic anxieties, while the
coronavirus brings fear of contact with strangers."
Ironically, this downturn comes at a time when
buying a home is more affordable than ever. Just last week, Freddie Mac
reported that interest
rates hit a near 50-year low, at 3.29% for a 30-year fix-rated mortgage.
"The dramatic fall in interest rates may
induce some potential buyers to take advantage of the better affordability
conditions, but it is too early to assess whether lower interest rates can
overcome the economic and health anxieties," says Yun.
Nonetheless, he continues, "in the short
term at least, home sales will be chopped by around 10%, compared to what would
have been the case, due to the spread of coronavirus.”
Seattle's housing
market: A harbinger?
As for what could happen next, many are
looking for clues in the Washington real estate market. It's still strong, but
due to the double whammy of the area's virus exposure levels and plummeting
stock portfolios, experts are watching it closely for signs of decline.
"Anytime you have local stocks like
Amazon and Microsoft experiencing a 15% drop, that is a lot of perceived wealth
that has been taken out of the market," says Nick Glant,
founding broker at Compass in Washington. "That said, some buyers and
investors are looking at housing as a safer asset class than equities given the
recent volatility."
Glant's biggest worry is whether the virus
forces certain areas of Washington to go on lockdown.
"The only thing I
would see as a detriment to selling in a significant way would be a
larger-scale quarantine situation," he says. "It will also be
interesting to see what happens to relocation buyers should more travel
restrictions be put in place. Tech relocation is a significant driver of our
market, and if people cannot easily come out to tour properties in advance of
taking a job here, they may be more apt to rent in the short term."
Meanwhile, home buyers in other areas hit hard
by COVID-19 (like California and New York) are feeling nervous, too.
"Concerns just started this week,"
says Janine Acquafredda, a broker at House n Key Reality in
Brooklyn, NY. "So far, homeowners haven’t voiced any concerns with regards
to showings, and sellers are still listing without restriction. But I do have
buyers and sellers reluctant to attend closings if it involves taking the
subway, and one closing was postponed by an attorney because his client was
very ill—exhibiting flu-like symptoms—and didn’t know what she had. He said,
'I’m not going to put myself in that position.'"
How home buyers and
sellers can limit their exposure
Ultimately, determined home buyers and sellers
will find a way—it may just look a little different than before. For one, the
days of lavish, party-atmosphere open houses with finger food or baked cookies
may be over, at least for a while.
"I do think agents may rethink hosting
large open-house events with spreads of food and drinks where people are
picking up plates, napkins, and plasticware along with pouring drinks out of
bottles," says Cara Ameer, a real estate agent in California.
Another way home buyers and sellers are
limiting their exposure is by opting for virtual tours.
"As a virtual tour provider in
Washington, DC, we are seeing an uptick in demand for video and more elaborate
virtual tours so homeowners don't need to have an open house," says Roman
Caprano at Sky Blue Media. "In our market, homes sell in days, so
many agents typically only invest in photos, but now they are purchasing more
content."
"These virtual tours work like Google
Street [View] within a house," says Jones, who uses Matterport software to
give buyers a 3D, multidirectional spin through a property.
While it can't completely replace an in-person
showing, says Jones, "a virtual tour can help them understand the house
better. For those that are concerned about the virus, this allows them to make
a more informed decision about the property and whether to get out and go see
it."
Nonetheless, "the reality is real estate
is a contact sport," says Ameer. "And that means exposing yourself to
a lot of potential germs from shaking hands, interacting at open houses, and
touching all sorts of doorknobs and light switches multiple times a day."
As such, she adds, "I think we need to
adopt a new normal of practices during this period of time.
"I now carry a canister of disinfecting
wipes in my car so I can wipe my hands and the steering wheel after being in
and out of houses," she says. "I have also wiped down lockboxes,
light switches, and doorknobs on my listings, and encourage customers to do the
same. While you don’t want to make anyone feel uncomfortable, it is better to
err on the side of caution rather than worry about exposure. You can never be
too careful."
Erica Sweeney is a writer whose work has
appeared in the New York Times, Parade, HuffPost, and other publications.
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