This is supposed to be the start of the peak season for real estate transactions in many states, but the COVID-19 pandemic has essentially shut down the ability for people to look at homes.
However, there are still some signs of life in the real estate business, despite the current situation.
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Eric Fontanot, president of Houston-based Patten Title, broke down what is going on in the real estate market at the moment while much of the country is under orders or strong recommendations to stay at home.
Transactions are still being made.
While many employees at title or mortgage companies aren’t in the office anymore, they are still hard at work at home putting through refinance applications and even offers on homes with mortgage rates going down in recent months.
“There are offers being made,” Fontanot said. “We are receiving purchase agreements on a daily basis that aren’t out of the realm of normal from a pay standpoint.”
Virtual tours becoming more common.
Despite the fact that people aren’t allowed to look at homes in person, it doesn’t mean they aren’t shopping around.
Virtual tours of homes have become more popular, and people are simply dissecting the photos of listings more, forming a plan of attack, so to speak, whenever they are allowed to look at homes in person again.
“People are leaning on the photos or videos that are posted online,” Fontanot said. “They’re just continuing to press forward. It’s just not as robust as it was.”
It will likely take longer to close.
While mortgage and title companies are pushing through deals struck before the pandemic to close on time, transactions now will likely take 15-30 days longer than usual until things return to normal.
“It is going to take some of the other ancillary, but essential, aspects (of) the closing process longer to get done,” Fontanot said. “Appraisers are having a more difficult time getting into homes. Surveyors are having a more difficult time.”
Will the pandemic drive make it a buyer’s market when things return to normal?
Inventory was low and values were high before the pandemic started, making it a seller’s market. But with unemployment high and the economy in a downward spiral, it’s fair to ask if values of homes will fall quickly, which would shift the market back toward buyers.
Like anything with the pandemic, Fontanot said it’s simply too early to tell.
“I don’t know that there’s been a dynamic shift yet,” he said. “The buying power is there. We have low interest rates, so the cost of money is less. That helps counterbalance the market and the values that are out there. It’s a little too early to tell if this is going to have a sustained impact on houses sitting on the market for a longer period of time.”