How Has COVID Affected the Housing Market?Aug 28, 2020 01:36PM ● By Kathleen Ganster
Julie Snider with Achieve Reality
It does not seem like anything, anywhere, has escaped the COVID pandemic, and the housing market is no exception. From restrictions in showing houses, to sales and closings, these changes may last forever.
But exactly what has changed? During various phases in the quarantine, looking at houses in person was not even possible. When on-property visits resumed, the method of showing houses had been greatly altered. According to Kathy Seaton, REALTOR® and senior real estate specialist with RE/MAX Select Realty, it used to be a simple process.
“If many agents wanted to show the same listing in a day, we could overlap the appointments—not so now,” she explained. “We have to schedule appointments so that we have 30 minutes of time in-between each appointment, so we can now only show half the number of buyers a home in one day.”
Before the buying/selling process even starts, many companies are asking their clients to sign waivers. “It’s a liability waiver that protects agents and their clients from liability associated with COVID for their health and safety,” explained Seaton, adding that she signs one as well.
The actual showings are also quite different.
“We ask that visitors and their agents wear masks; put on shoe covers or remove shoes; sanitize their hands prior to viewing the home and leaving the home; limit touching anything; practice social distancing; and we limit the number of visitors through a home,” said Seaton.
Sellers are asked to open blinds, drapes and closets, turn on all the lights, and keep a bottle of hand sanitizer near the front door prior to showings. Sellers and family members should also vacate the inside of the property, if possible, during showings.
Technology has become even more important in the buying and selling process since the pandemic. “Buyers, sellers, and their real estate agent partners are going beyond the box to effectively market homes and offer enhanced technological mediums to allow for seamless transactions,” said Benjamin Kramer, REALTOR® and sales associate, Howard Hanna.
Kramer explained that agents are able to assist their buyers “in real time” to track buyers’ interests and to help pinpoint ideal properties for their searches on their smartphones and computers. Sellers also benefit from technology because their homes are marketed through innovative methods that help them reach more potential buyers.
“Buyers are able to get a room-by-room, 360-degree tour of a potential property from wherever they may be, eliminating potential visits to homes that ultimately don't fit the bill for their unique and specific needs,” Kramer said.
According to local real estate experts, it is currently a sellers’ market. With the pandemic came an inventory shortage of properties and that means quick sales with higher price points.
“Since May when the market reopened and we were able to start in-person appointments, the market has been in a feeding frenzy,” said Julie Snider, accredited buyer’s representative (ABR) with Achieve Reality. “Homes that are priced right are receiving multiple offers and selling quickly, even over asking price.”
According to Karla Casertano, REALTOR®, Coldwell Banker, it is now common to see houses going over the asking price.
“On one particular home my buyers bought, within 24 hours of its listing, there were 12 showings and multiple offers. My buyers had to go $30,000 above asking in order to purchase the home,” she said.
Open houses have also recently resumed, but with much smaller crowds and health guidelines in place. “We limit it to three people in a home at a time; the days of 30-plus people walking through an open house at one time are over,” said Snider, adding that she feels that even more changes will be made to make the process as easy as possible.
“I think agents will take more time to better prepare their clients for the market; to make sure they understand the sales agreement and how to compete in a multiple offer situation, and to show them how to get from start to finish without too many hiccups,” she said.
Tips for Buyers
According to Casertano, one of the most important things to do when looking to buy a home is to get pre-approved. “That way, when you find a home that you love, you'll be ready to go,” she said.
The competitive marketplace can be tricky for buyers right now, as well as the new health standards in place, so Snider recommends knowing issues even before beginning the process.
“Buyers need to understand the same health and safety risks as sellers, and abide by the current rules for us to safely show homes,” she said. “They also need to understand how competitive the market is with low inventory right now. Interest rates have never been better, so there are many buyers in the market competing for the same homes.”
Like Casertano, Snider encourages buyers to get pre-approved. “It can be really frustrating when buyers place offers and are outbid many times. There are tools and tricks that can be used when presenting a winning offer, but the buyer needs to be aware of those things and have an agent that helps them navigate each offer.
“Being pre-approved is the biggest tool for a buyer to have to prepare them for an accepted offer,” she added.
Tips for sellers
According to Kramer, a strong relationship with your real estate agent is key.
“Trusting your real estate agent and partner and understanding the marketing plan that is being implemented for your specific home allows all parties to be fully informed each step of the way,” he explained.
Snider emphasized that just like buyers, sellers must also be aware of the health standards and issues involved with house sales during COVID.
“Sellers need to understand the process in selling their homes and the potential risks involved in having people through to tour the home. Currently, we are limited to only three people in a home at a time, and we are asking the same health screening questions that most doctors’ offices and other businesses ask before any in-person appointments are scheduled,” she said.
And while it might sound wonderful that there are often multiple bidders for a property, that can come with its own challenges.
“Sellers also need to understand the terms of the sales agreement very well, especially when it comes to financing and the appraisal,” said Snider. “It’s great to sell your home for over asking price, but what if it doesn’t appraise for the sale price? What happens next?
“It is important to have all of these discussions upfront with a seller prior to accepting an offer because the sale price might not be the determining factor in accepting an offer with great terms that will get you to the closing table,” she added.