Recently, the National Association of Retailers surveyed agents about protocols for showing properties and homes during the COVID-19 pandemic. Usually, this traditionally would be the busiest time of year for real estate activity, with sellers "waiting until spring" to put up their homes for sale, because their yards look prettier and buyers awaken and come out in droves to shop. Our local markets started off strong in 2020 with a wonderful boost of mortgage rates under 4%. Now—with the stock market dropping all of its gains in a decade and folks' 401(k) plans looking sickly at best—sellers are scared.
Here are some common facts: The reality is most people don't have enough savings to make three consecutive months of mortgage payments without a paycheck. In this time of fear, sellers are waiting to place their homes on the market, keeping inventory low or wondering if they need to act now before prices drop. Buyers ready to throw down earnest money on a purchase contract are watching mortgage rates to see if a 30-year conventional note could possibly go below 3%. The fear of job loss due to pandemic-related layoffs can also keep buyers out of the market. Yes, housing prices could fall with a recession looming. Some people might also lose their homes (although the Department of Housing and Urban Development announced that if your home is in foreclosure, they won't kick you out until the pandemic has ended). How very nice of them.
You can be the manager of a retail store or restaurant for several years with a good income and excellent credit, but if your boss is forced to close because of restrictions imposed by government leaders, you won't receive a paycheck for a while. Will the U.S. government intervene and tell lenders they can't discriminate against borrowers after this is over?
Current preventative measures might also inadvertently affect the market. Some sellers might not want to stage open houses with people who do not follow strict safety protocols or elderly owners. Most buyers go online first anyway to shop for homes by viewing virtual tours. Even under optimal conditions, buyers often go online and don't dig deep to see what the neighborhood is like or what is sitting next door to their dream home (a freeway ramp, an 8-plex). If your broker is comfortable touring properties themselves, save time and ask them to preview the property for you via FaceTime.
One year before being elected president, Abraham Lincoln famously said, "And this, too shall pass away" at the Wisconsin State Fair. This virus will eventually subside. Nationally and individually, we will learn a lot for future crisis planning. And, who knows, emergency supply rooms might become a trend like the "safe rooms" people built after 9/11, and could be a selling feature of new construction homes.