Leigh Giangreco is a freelance reporter based in D.C. Her work has appeared in DCist, Politico Magazine and The Washington Post.
Despite lockdown orders and economic uncertainty, people are still selling and buying homes, thanks to virtual house showings and no-contact contract signings.
The coronavirus pandemic may have utterly transformed life in New York City, but one thing hasn’t changed: Manhattanites still want to buy houses in Westchester County.
New real estate listings have remained steady in the affluent suburbs of Westchester, despite the collapse of inventory in New York City. Patricia Moccia, a real estate broker with William Raveis Real Estate in Scarsdale, is limited to virtual showings now. “I’m getting quite a few calls from buyers who want to leave the city,” Moccia says. “I have someone looking at one of my properties and making an offer sight unseen.”
The impact of coronavirus on once-hot real estate markets is one of many emerging economic narratives of the pandemic era. Despite fears of a housing crash with echoes of 2008, past experience with major disease outbreaks seems to indicate that prices will remain stable or rebound quickly, according to a March report from Zillow that looked at the 1918 influenza outbreak in U.S. cities, and Hong Kong’s experience with SARS in 2003. After a robust February, existing U.S. homes sales fell in March, particularly in the West, according to data from the National Association of Realtors. But the median price of an existing home increased by 8% compared to last March.
It’s too early to say what the longer-term real estate picture will look like as pandemic-powered global recession yawns before us, but Lawrence Yun, NAR’s chief economist, said in an April statement that he expected prices to continue to rise in the coming months, despite “more temporary interruptions to home sales.”
Buyers and sellers are getting mixed signals when it comes to negotiating the spring housing market in the midst of a pandemic. The uncertainty and economic chaos sown by coronavirus is balanced out by record-low interest rates, a factor that’s boosted mortgage applications. Those rates are likely to only benefit those with pristine credit, as mortgage lenders tighten restrictions. Only 50% of Americans believe it’s a good time to buy a home, according to a recent Gallup poll. That’s the lowest level of confidence Gallup has measured since 2006, just before the housing bubble burst. Economists and real estate agents predict that homebuying will stagnate during stay-at-home orders but rebound once government restrictions are lifted.
Those who do choose to buy or sell now will find that, like office meetings and happy hours, the once-intimate world of real estate has moved to Zoom and FaceTime. As stay-at-home orders swept the country in March, the number of 3D tours created on the real estate website Zillow spiked. Online tours increased by 188% that month compared to February, according to Zillow.
“We’ve all been saying for years that this is an internet-driven business,” he says. “We just never thought it would be this valuable,” says Brian Murray, a brokerage manager of Julia B Fee Sotheby's International in Scarsdale, New York.
New York agents experienced regulatory whiplash after Governor Andrew Cuomo deemed the real estate business nonessential when lockdowns began, only to change course two weeks later. The Empire State Development Corporation allows home inspections and appraisals, but buyers need to stay away, and other business, including house showings, must be conducted virtually. With those strict restrictions in place, many realtors are choosing to wait out the lockdowns this spring.
“I’m staying in touch with all my clients, so we’ll be ready to spring into action as soon as we can,” said Therese Militana Valvano, associate broker with Coldwell Banker in Westchester County. Like Moccia, she’s been hearing a lot from buyers looking for homes outside of the city. “They all said the same thing — ‘We were undecided about what we wanted to do but this has convinced us that we want to move,’” Valvano said.
Around the nation’s capital, real estate agents are dealing with a hodgepodge of stay-at-home orders. Maryland has restricted in-person showings to no more than three people by appointment only and D.C. banned open houses. Virginia is continuing open houses and Virginia Realtors outlined the possible liabilities of the practice. In general, home showings are continuing, under varying social distancing guidelines.
No matter the government directive, some would-be sellers are deciding that it’s not worth the risk. “There are a lot of properties off the market because people don’t want people in their homes,” says Lyssa Seward a realtor and president of the Seward Group at TTR Sotheby’s International working in D.C. and Alexandria, Virginia. “I’m going to honestly say, we get nervous showing homes. We know it’s a risky thing to do, we exercise all the cautions, we’ve got all the wipes and masks.”
Vacant homes are still being listed and shown, she adds. In D.C., the supply of vacant homes for sale could carry the market, says Brittanie DeChino, vice president of the Seward Group. “My hope is it will keep the remaining buyers active,” she says.
Three out of four of DeChino’s recent showings have been vacant homes. Agents are adding new taglines like “Just been cleaned!” and “Disinfected!” DeChino takes an antiseptic approach herself when she shows a house, carefully opening lockboxes with gloved hands and barring children from showings. “If it’s occupied, then I ask if they’re serious buyers,” she says. “Usually I would say, ‘Let’s see 17 houses in a day,’ but now I ask them to look at a satellite view.”
The new real estate normal in D.C. is listing appointments over Zoom and live virtual open houses over Facebook live or Skype. And so far, the area’s hot market isn’t less competitive for digital shoppers. Many sellers removed their listings at the beginning of April, says Tanya A. Cunningham, an associate broker at Century 21 working D.C., Maryland and Virginia. That lack of inventory means more competition for the buyers that remain, she says. If you really need to buy a house right now, come armed with a strong lender approval letter; cash buyers should have proof of funds.
Precarious job situations have dissuaded some shoppers. “I personally have had several buyers totally postpone their searches,” Cunningham says. Two of those buyers had been furloughed, while another still working at the Department of Transportation didn’t feel comfortable looking at houses. That apprehension had less to do with the danger of coronavirus lurking in a home and more with the smaller number of houses on the market. “There’s a lack of inventory, nobody wants to feel like they’re settling,” Cunningham says. “His main issue was he’s not even seeing anything he loves.”
In hard-hit New Orleans, Leslie Heindel has been horrified by some agents’ attempts to capitalize on the coronavirus to close sales, warning buyers that prices will surge when lockdowns ease. One is proffering branded hand sanitizer as a promotional aid, she says. “Agents don’t miss an opportunity to slap their name on something,” she says. “I’m so nervous about anything we’re posting or doing right now.”
Heindel is taking a more cautious approach. She’s not listing any home that’s occupied and begged one client who listed her occupied home in mid-January to take her property off the market. “She feels cramped in her current situation. I know she’s going stir crazy because she keeps messaging me wanting to get this house sold.”
Heindel couldn’t convince her, so she’s taking all necessary precautions to show the home, making sure potential buyers see the 3D tour. During real-life showings, potential buyers are wearing masks and gloves, and homeowners leave all the lights on and closet doors open, so no touching in needed.
Real estate agents aren’t the only ones deploying contactless techniques during the pandemic. Many lenders have not adopted remote online notarization and still require wet signatures for a mortgage. The old-school practice has remained in place to combat fraud, but title companies now worry the face-to-face interaction could put their employees at risk. At Federal Title and Escrow Company in Washington, D.C., settlement attorneys drive to a home and drop a packet at the front door with sterile pens. “It’s absurd — you’re supposed to be there to witness the signatures,” said Federal Title’s CEO Todd Ewing. “You’re passing paper back and forth, they’re touching the paper, despite the fact that our staff is wearing latex gloves.”
Some real estate agents have set up their own restrictions to limit inquiries to serious buyers. At Team Diva Real Estate at Coldwell Banker Bain in Seattle, managing broker Kim V. Colaprete and her team require a pre-approval letter from a lending institution demonstrating that the buyer’s finances have been reviewed before taking them on. Team Diva has stopped all in-person showings and Colaprete is advising most of her buyers to wait out Covid-19. Agents can still meet with new buyers over FaceTime and have asked sellers to give virtual tours of the house. Currently, all of their new listings are vacant.
“We’re not listing any homes that someone is living in. I’ve been very hardcore about if you are living in a home it’s really not safe for you to do that,” she says. “Many of the buyers have put themselves on hold because they’re trying to honor the stay-at-home. Any new people in the docket, we would prefer if we don’t put you at risk.”
Like many locked-down workers, Colaprete has found certain advantages to going remote. Whereas she once met with buyers in an office, now she can see them at their kitchen table over Zoom, a move that’s given her more insight into the specific quirks of their homes — and allowed her to hone her people skills.
“I take notes of the background in their home; sometimes I ask about their art,” she says. “It shows you’re observant, you're’ focused on them and it makes them feel like you care about their surroundings. It’s a way to break the ice with people and make them comfortable.”