After a strong start to 2020, sales of both newly built and existing homes hit the skids in March as the coronavirus pandemic began to spread.
Though millions were laid off and thousands hospitalized, some encouraging housing data arose in mid-April– perhaps sooner than expected. For the seven days ending April 19, pending sales - measuring signed contracts, not closings – rose 6.2% week over week.
Though that's still down significantly from 2019, it's an amazing recovery from the 32% dip pending sales took just a month prior. It appears many potential home buyers are not deterred by the pandemic. In fact, the social distance limitations of the crisis have taken the entire pace of housing industry technology from a slow jog to a full-on sprint in order to earn customers.
After all, nearly every phase of a real estate transaction can be completed without being in each other’s physical presence. You can reach out initially with social media and email, then touch base in real time with messaging apps and online conference calls.
And in the age of the coronavirus, virtual tours aren’t just a thing – they’re becoming the only thing. Major listing services report virtual tours are up by more than 500%. since March. In a recent survey, nearly a quarter of real estate agents reported clients signing contracts to buy homes without physically seeing the property.
The crisis is building resourcefulness at closing, too. Creative titling companies and attorneys facilitate curbside and parking lot services, running masked and gloved between buyer, seller, and agent cars to collect needed signatures and distribute documents.
“Remarkably, 10% of Realtors report the same level or even more business activity now than before the economic lockdown,” said National Association of Realtors Chief Economist Lawrence Yun.
Most of America's real estate agents believe the housing market will recover quickly when the economic upheaval of the coronavirus health abates. Maybe all the promise from the beginning of the year will return with a bang, offsetting all the sales lost in the spring season.
In an NAR “Flash Survey," almost 60% said they believe most potential buyers and sellers are ready to return to the market in a couple of month.
But while the broad consensus is that residential purchases will come back quickly, exactly how it all shakes out is anyone’s guess.
Economic crises can take a toll on peoples' psyches. Many say the Great Recession was responsible for dampening the Millennial generation’s enthusiasm for homebuying.
After watching their parents and adult friends in foreclosure and/or bankruptcy, many were in no hurry to buy homes of their own, helping throw the national real estate cycle out of whack.
The survey also indicated most potential buyers expect prices to drop, but most experts say overall prices will remain strong.
"Home prices should remain stable because of a pandemic-induced reduction in inventory coupled with less immediate concerns over foreclosures,” Yun said.