Spring is typically a busy time for buying and selling homes, but the coronavirus pandemic has pushed homeowners and shoppers into new, uncharted territory. Shelter-in-place orders and concerns about contagion have forced many real estate agents to cancel open houses, while unemployment is at a historically high level.
But even in the midst of a deadly pandemic that is devastating the economy, many Americans still want or even need to buy a home in the near future.
"I definitely have clients that are still interested in viewing homes but have been honest that they won't put pen to paper and write an offer until they know the health crisis has passed and they can assess the impact on real estate and the economy,” says Noah Grassi, a Realtor® for Compass in San Diego.
So, what does the current state of the housing market mean for buyers? With so much uncertainty these days, buying—or planning to buy—a home during a pandemic requires extra careful consideration. That's why we reached out to real estate agents to get their honest takes on what's really happening in the housing market in the time of COVID-19, how buyers can prepare, and what we can likely expect when the pandemic subsides.
There may be some reductions in home prices
The federal government has provided relief through cash payments, and lenders are also offering mortgage forbearance options. But with unemployment numbers rising, more people could be forced to sell their homes or enter foreclosure, potentially leading to reductions in home prices.
“Due to millions of job losses per week, and the long-term impact of COVID, I expect housing prices to shift into a downward trend,” says Justin Brennan with Brennan Real Estate Group, Pacific Sotheby’s International Realty. “To what extent they go down will be determined by how many job losses become permanent versus temporary."
If the price cuts materialize, that would be good news for buyers in locations where affordability was already stretched thin.
More homes will come onto the market
A bigger inventory of homes on the market may soon be on the horizon for buyers.
“There's an inventory of sellers on the sidelines, and it is growing every day,” says Grassi. “These are owners that still reside in their property and don't want strangers—agents and potential buyers—walking through their home at the moment due to the health crisis. Once it is clear the risk is minimal, I think we are going to see a big increase in the number of homes for sale.”
There's a chance that buyers are also waiting in the wings for the coronavirus pandemic to end and the economy to get back on its feet. But the likely big inventory of homes for sale could put buyers in a good position.
Interest rates are likely to stay low
Over the past few months, mortgage interest rates have been lower than we've ever seen. And experts expect that trend to continue.
“The general consensus of the experts is that mortgage interest rates will remain attractive for many months to come,” says Grassi. "If buyers are hoping to try to find a deal on their mortgage during this health crisis, they should be writing offers now."
If low mortgage rates and being stuck indoors have convinced you it's time to find a new home, this may be a time to consider buying.
Keep in touch with your mortgage lender
Serious buyers should always have their mortgage lender on speed dial, but in these unprecedented times, this advice is more relevant than ever.
“Make sure you are constantly speaking with your lender on updates in the lending market,” says Brennan. “If you fall in love with a home, focus on the long term and getting a great interest rate and payment versus trying to time the market.”
Link to Full Article
“Make sure you are constantly speaking with your lender on updates in the lending market,” says Brennan. “If you fall in love with a home, focus on the long term and getting a great interest rate and payment versus trying to tim
Thursday, April 30, 2020
Should I Sell My House Now? The Essential Guide To Selling in the Age of Coronavirus - Realtor.com - April 13, 2020
Spring is usually prime home-selling season—but this spring is a whole different ballgame. With the coronavirus crisis intensifying and the economy in a tailspin, some homeowners may be asking themselves: Should I sell my home during the coronavirus pandemic, or wait?
To be sure, this spring's home-selling season will be anything but normal. So far, the latest National Association of Realtors® Economic Pulse Flash Survey conducted mid-March—which already feels like a very long time ago—revealed that 48% of real estate agents have noted a dip in buyer interest compared with a year ago.
“The coronavirus is leading to fewer home buyers searching in the marketplace, as well as some listings being delayed," says Lawrence Yun, chief economist for the NAR. But this news shouldn't necessarily serve as a dark omen or an intractable obstacle to all home sellers.
Is it safe to sell your home amid the coronavirus outbreak?
For starters: If you need to sell your home for personal reasons—because you are relocating for a job, in need of more/less space, or facing new financial circumstances that require a move—you shouldn't let the coronavirus stop you.
In late March, the Cybersecurity and Infrastructure Security Agency under the U.S. Department of Homeland Security declared residential real estate sales an "essential service" that will be allowed to continue. That said, check with your real estate agent and local government for what's allowed in your area, and keep in mind that things could change as this pandemic progresses.
In certain areas, in-person home showings are still happening, although how they are held (and how many people are allowed to attend) has changed. The NAR has released open house guidelines urging real estate agents to limit the number of guests per open house to 10 at a time. They also require potential buyers to wash their hands or use hand sanitizer when they enter the home, and remove their shoes or wear booties over their shoes.
“Sellers incorrectly assume that there will be no showings,” says Adam Kruse, a real estate agent with the Hermann London Group near St. Louis. “We haven’t experienced a significant reduction in showings."
This is particularly true for certain types of properties. Specifically: If you've already moved out and the home you're selling is vacant, you should have an easy job enticing buyers. Let's face it, an empty house seems far safer to visit than one where people still live.
Why your home's listing online matters more than ever
While certain hard-hit areas (such as New York City) have forbidden in-person home showings, this doesn't mean all is lost, thanks to the increased use of virtual home tours using tools such as Facebook Live, Immoviewer, Matterport, Kleard, and others. While virtual tours and showings are a great way to keep home sellers and buyers safe, this new reality has also raised the bar on how homes should be presented and marketed online.
In other words: A few nice photos of your home may not cut it during this period.
“You only get one chance at a first impression, so you don’t want to be using poorly shot and lit iPhone photos and videos," says Ressie Krabacher, a residential broker with the Chicago Home Partner team of At Properties.
So make sure the real estate agent you hire is well versed in digital technologies that will be used to show off your home in the best light. (We'll dive into this topic in more depth in a later installment.)
Coronavirus' impact on the housing market and buyer behavior
While your local real estate market could dictate whether this spring is still a good time to list your home, housing inventory is low nationwide. According to realtor.com®’s March Housing Trends Report, there were 15.7% fewer homes for sale this March compared with a year ago.
Low inventory spells good news for sellers, since there are fewer homes for buyers to choose from. Plus, prices are up, too, with the national median listing prices 3.8% higher than a year earlier, at $320,000.
That said, most of the home sales that closed in March were likely agreed to in February or even earlier, points out realtor.com Chief Economist Danielle Hale. April and beyond may be a different story.
“Our inventory and listing data can provide some early insight into how housing markets may be impacted by COVID-19, but the situation and reactions to it are still rapidly evolving,” Hale says. "I expect a slightly higher number of contracts to fall apart, either because mortgage market volatility or, in some cases, job or income loss prevents buyers from getting the mortgage they expected."
Mortgage interest rates remain low, enticing buyers, but uncertainty in the economy and layoffs have led some potential buyers to hold off on a home purchase.
“That doesn’t mean all transactions are going to stop, but everyone is taking a second look at if buying right now is the best decision,” says Noah Brinker, a real estate investor and owner of Cash Homes NWA in Northwest Arkansas.
While home prices remain fairly steady right now, if economic conditions worsen, more buyers might give up and home prices could drop. So, if your home is ready to list right now, you might want to strike while the iron is still (somewhat) hot.
“With uncertainty at a peak, it seems to me that if the market is going to teeter one way, it would be down at least temporarily,” Kruse says. “So why wait to sell when prices are possibly going to go down?”
Why a home sale might take longer today
If you do land a buyer, be warned that your sale might take longer than usual. On average, it takes 50 days to close on a house, but the pandemic could drag things out even longer.
What's the holdup? Specifically, buyers are asking for more contingencies on their offers in light of COVID-19, such as longer home inspection windows and extended closing times. Along with closings potentially taking longer, some buyers may face delays in mortgage pre-approval because of changing financial circumstances. Home inspections may be delayed, and it could take longer to get repairs made.
Worried your home might sit on the market? The stigma around stale listings is changing fast, too.
"Sellers also assume that their days on market will be high," says Kruse. "But we don’t think that people will be as interested in DOM in the upcoming six months."
In fact, the Real Estate Board of New York recently asked real estate listing sites to suspend the DOM clock on residential listings, and more areas might follow suit.
Link to Full Article
Sellers face unique and uncertain times, and, as such, patience is essential. In our next installment, we'll explore the various ways you can sell a house safely. Stay tuned!
To be sure, this spring's home-selling season will be anything but normal. So far, the latest National Association of Realtors® Economic Pulse Flash Survey conducted mid-March—which already feels like a very long time ago—revealed that 48% of real estate agents have noted a dip in buyer interest compared with a year ago.
“The coronavirus is leading to fewer home buyers searching in the marketplace, as well as some listings being delayed," says Lawrence Yun, chief economist for the NAR. But this news shouldn't necessarily serve as a dark omen or an intractable obstacle to all home sellers.
Is it safe to sell your home amid the coronavirus outbreak?
For starters: If you need to sell your home for personal reasons—because you are relocating for a job, in need of more/less space, or facing new financial circumstances that require a move—you shouldn't let the coronavirus stop you.
In late March, the Cybersecurity and Infrastructure Security Agency under the U.S. Department of Homeland Security declared residential real estate sales an "essential service" that will be allowed to continue. That said, check with your real estate agent and local government for what's allowed in your area, and keep in mind that things could change as this pandemic progresses.
In certain areas, in-person home showings are still happening, although how they are held (and how many people are allowed to attend) has changed. The NAR has released open house guidelines urging real estate agents to limit the number of guests per open house to 10 at a time. They also require potential buyers to wash their hands or use hand sanitizer when they enter the home, and remove their shoes or wear booties over their shoes.
“Sellers incorrectly assume that there will be no showings,” says Adam Kruse, a real estate agent with the Hermann London Group near St. Louis. “We haven’t experienced a significant reduction in showings."
This is particularly true for certain types of properties. Specifically: If you've already moved out and the home you're selling is vacant, you should have an easy job enticing buyers. Let's face it, an empty house seems far safer to visit than one where people still live.
Why your home's listing online matters more than ever
While certain hard-hit areas (such as New York City) have forbidden in-person home showings, this doesn't mean all is lost, thanks to the increased use of virtual home tours using tools such as Facebook Live, Immoviewer, Matterport, Kleard, and others. While virtual tours and showings are a great way to keep home sellers and buyers safe, this new reality has also raised the bar on how homes should be presented and marketed online.
In other words: A few nice photos of your home may not cut it during this period.
“You only get one chance at a first impression, so you don’t want to be using poorly shot and lit iPhone photos and videos," says Ressie Krabacher, a residential broker with the Chicago Home Partner team of At Properties.
So make sure the real estate agent you hire is well versed in digital technologies that will be used to show off your home in the best light. (We'll dive into this topic in more depth in a later installment.)
Coronavirus' impact on the housing market and buyer behavior
While your local real estate market could dictate whether this spring is still a good time to list your home, housing inventory is low nationwide. According to realtor.com®’s March Housing Trends Report, there were 15.7% fewer homes for sale this March compared with a year ago.
Low inventory spells good news for sellers, since there are fewer homes for buyers to choose from. Plus, prices are up, too, with the national median listing prices 3.8% higher than a year earlier, at $320,000.
That said, most of the home sales that closed in March were likely agreed to in February or even earlier, points out realtor.com Chief Economist Danielle Hale. April and beyond may be a different story.
“Our inventory and listing data can provide some early insight into how housing markets may be impacted by COVID-19, but the situation and reactions to it are still rapidly evolving,” Hale says. "I expect a slightly higher number of contracts to fall apart, either because mortgage market volatility or, in some cases, job or income loss prevents buyers from getting the mortgage they expected."
Mortgage interest rates remain low, enticing buyers, but uncertainty in the economy and layoffs have led some potential buyers to hold off on a home purchase.
“That doesn’t mean all transactions are going to stop, but everyone is taking a second look at if buying right now is the best decision,” says Noah Brinker, a real estate investor and owner of Cash Homes NWA in Northwest Arkansas.
While home prices remain fairly steady right now, if economic conditions worsen, more buyers might give up and home prices could drop. So, if your home is ready to list right now, you might want to strike while the iron is still (somewhat) hot.
“With uncertainty at a peak, it seems to me that if the market is going to teeter one way, it would be down at least temporarily,” Kruse says. “So why wait to sell when prices are possibly going to go down?”
Why a home sale might take longer today
If you do land a buyer, be warned that your sale might take longer than usual. On average, it takes 50 days to close on a house, but the pandemic could drag things out even longer.
What's the holdup? Specifically, buyers are asking for more contingencies on their offers in light of COVID-19, such as longer home inspection windows and extended closing times. Along with closings potentially taking longer, some buyers may face delays in mortgage pre-approval because of changing financial circumstances. Home inspections may be delayed, and it could take longer to get repairs made.
Worried your home might sit on the market? The stigma around stale listings is changing fast, too.
"Sellers also assume that their days on market will be high," says Kruse. "But we don’t think that people will be as interested in DOM in the upcoming six months."
In fact, the Real Estate Board of New York recently asked real estate listing sites to suspend the DOM clock on residential listings, and more areas might follow suit.
Link to Full Article
Sellers face unique and uncertain times, and, as such, patience is essential. In our next installment, we'll explore the various ways you can sell a house safely. Stay tuned!
In-Person Showing Regulations for Denver, Boulder, Broomfield and Jefferson Counties - Mountain Metro Association of REALTORS - April 30, 2020
The current regulations on real estate showings have been changing on a weekly basis and are subject to county regulations and city ordinances at this time. In-person real estate showings are permitted in several counties. Here are the breakdowns by county:
Jefferson and Boulder Counties:
- For unoccupied (vacant) homes and land only
- By appointment only (no open houses)
- Face coverings required for all participants
- Number of in-person participants limited to the greatest extent possible and participation by children is strongly discouraged
- Social Distancing Requirements must be met at all times by the clients and the Realtors
- Individuals shall maintain at least a six-foot distance from other individuals, wash hands with soap and water for at least twenty seconds as frequently as possible or using hand sanitizer, cover coughs or sneezes (into the sleeve or elbow, not hands), regularly clean high-touch surfaces, and not shake hands.
- Realtors must maintain a detailed log of customer interactions in case contact tracing becomes necessary. This log should include name, date, and location of contact, as well as the contact’s phone number and/or email address.
- Realtors must ensure or provide gloves and face coverings for any customer interactions
- Realtors should perform tasks remotely or virtually whenever possible, including pre- and post- visit conferences.
- Open houses are not permitted
Denver City and County:
- Open houses are not permitted
- Properties must be vacant, with no one living there, unless the only occupant in the home is the owner and not a rental tenant
- Social distancing requirements must be followed at all times
- All commonly-used surfaces must be wiped down and sanitized before and after the showings
Broomfield County:
- No in-person showings are allowed through May 8th
- In person-showings will be allowed beginning on May 9th (likely, with specific regulations that have not yet been posted)
Other Counties:
At this time, most counties in the Denver Metro area have extended their stay at home orders through May 8th, and have not stated whether in-person showings are now permissible. The regulations are changing constantly, so please contact me directly to get the latest information for your county.
In addition, specific HOA Communities, especially those with high risk populations, may have additional provisions which can exclude in-person showings in an effort to keep residents of these communities safe.
Jefferson and Boulder Counties:
- For unoccupied (vacant) homes and land only
- By appointment only (no open houses)
- Face coverings required for all participants
- Number of in-person participants limited to the greatest extent possible and participation by children is strongly discouraged
- Social Distancing Requirements must be met at all times by the clients and the Realtors
- Individuals shall maintain at least a six-foot distance from other individuals, wash hands with soap and water for at least twenty seconds as frequently as possible or using hand sanitizer, cover coughs or sneezes (into the sleeve or elbow, not hands), regularly clean high-touch surfaces, and not shake hands.
- Realtors must maintain a detailed log of customer interactions in case contact tracing becomes necessary. This log should include name, date, and location of contact, as well as the contact’s phone number and/or email address.
- Realtors must ensure or provide gloves and face coverings for any customer interactions
- Realtors should perform tasks remotely or virtually whenever possible, including pre- and post- visit conferences.
- Open houses are not permitted
Denver City and County:
- Open houses are not permitted
- Properties must be vacant, with no one living there, unless the only occupant in the home is the owner and not a rental tenant
- Social distancing requirements must be followed at all times
- All commonly-used surfaces must be wiped down and sanitized before and after the showings
Broomfield County:
- No in-person showings are allowed through May 8th
- In person-showings will be allowed beginning on May 9th (likely, with specific regulations that have not yet been posted)
Other Counties:
At this time, most counties in the Denver Metro area have extended their stay at home orders through May 8th, and have not stated whether in-person showings are now permissible. The regulations are changing constantly, so please contact me directly to get the latest information for your county.
In addition, specific HOA Communities, especially those with high risk populations, may have additional provisions which can exclude in-person showings in an effort to keep residents of these communities safe.
This Is the State of the Real Estate Market Right Now: What the Numbers Show - Realtor.com - April 30, 2020
As the COVID-19 health crisis continues to ravage the world, along with the global economy, it's not surprising that it's also sidelining prospective home buyers and sellers.
About 85% of residential Realtors® reported seeing a decline in home buyer interest, according to the National Association of Realtors® Flash Survey: Economic Pulse. About 2,500 real estate professionals participated in the survey, which was conducted April 26–27. Thirty-five percent of Realtors saw buyer interest fall by half—or even more.
"It's obvious that the housing market is still struggling in this crisis," says realtor.com® Senior Economist George Ratiu.
"A lot of buyers are coming to terms with the magnitude of the economic damage," says Ratiu. More than 30 million people have filed for unemployment since this crisis began last month, and more layoffs are expected. "Not surprisingly, you see that in [these] results."
The lack of buyer interest is particularly pronounced given that spring is usually the start to the normally busy home-buying and -selling season. Low mortgage interest rates often give the market a boost as well. Rates reached an all-time low this week, falling to 3.23% for 30-year fixed-rate loans in the week ending April 30, according to Freddie Mac.
In addition, more than half of residential Realtors, 60%, reported that sellers were delaying attempting to sell their homes or were postponing the process indefinitely, according to the survey.
In addition, about 24% of sellers reduced the prices of their abodes in light of the stunning number of job losses and folks losing additional income.
“There’s clearly a disconnect between sellers still active in the market and potential buyers," says Ratiu. "Homes that were priced for January 2020, when the economy and employment were still growing, are not likely to sell for the same price in the current downturn.”
As bad as this all sounds, it was worse two weeks ago, when 90% of residential Realtors reported buyer interest was down. Roughly 67% said sellers were delaying sales or pulling their homes off the market. This survey was taken April 12–14 with nearly 2,300 participants.
"Transactions are still taking place," says Jessica Lautz, NAR's vice president of research. However, "buyers and sellers should expect it's going to be a very different experience than perhaps they dreamed of. ... There very well could be delays throughout that process, and the transaction will be happening more virtually."
Link to Full Article
About 85% of residential Realtors® reported seeing a decline in home buyer interest, according to the National Association of Realtors® Flash Survey: Economic Pulse. About 2,500 real estate professionals participated in the survey, which was conducted April 26–27. Thirty-five percent of Realtors saw buyer interest fall by half—or even more.
"It's obvious that the housing market is still struggling in this crisis," says realtor.com® Senior Economist George Ratiu.
"A lot of buyers are coming to terms with the magnitude of the economic damage," says Ratiu. More than 30 million people have filed for unemployment since this crisis began last month, and more layoffs are expected. "Not surprisingly, you see that in [these] results."
The lack of buyer interest is particularly pronounced given that spring is usually the start to the normally busy home-buying and -selling season. Low mortgage interest rates often give the market a boost as well. Rates reached an all-time low this week, falling to 3.23% for 30-year fixed-rate loans in the week ending April 30, according to Freddie Mac.
In addition, more than half of residential Realtors, 60%, reported that sellers were delaying attempting to sell their homes or were postponing the process indefinitely, according to the survey.
In addition, about 24% of sellers reduced the prices of their abodes in light of the stunning number of job losses and folks losing additional income.
“There’s clearly a disconnect between sellers still active in the market and potential buyers," says Ratiu. "Homes that were priced for January 2020, when the economy and employment were still growing, are not likely to sell for the same price in the current downturn.”
As bad as this all sounds, it was worse two weeks ago, when 90% of residential Realtors reported buyer interest was down. Roughly 67% said sellers were delaying sales or pulling their homes off the market. This survey was taken April 12–14 with nearly 2,300 participants.
"Transactions are still taking place," says Jessica Lautz, NAR's vice president of research. However, "buyers and sellers should expect it's going to be a very different experience than perhaps they dreamed of. ... There very well could be delays throughout that process, and the transaction will be happening more virtually."
Link to Full Article
Picuris Earthship - Unique Property of the Month - Currently For Sale
This off grid green building has 2 generous size bedrooms, 2 unique bathrooms, copper counter tops in the kitchen and custom cabinets throughout. The interior greenhouse runs the length of the building. Even in the garage which was designed to be an electric car charging station! Set on a 1.76 acre lot in the Greater World Community which offers 340 acres of common land and borders the newly created National Monument
So, what is an Earthship? The Earthship archecture concept began to take shape in the 1970s. The architect Michael Reynolds wanted to create a home that would do three things: first, it would utilize sustainable architecture, and material indigenous to the local area or recycled materials wherever possible; second, the homes would rely on natural energy sources and be independent from the "grid"; thirdly, it would be feasible for a person with no specialized construction skills to build. Eventually, Reynolds's vision was transformed into the common U-shaped earth-filled tire homes seen today.
An Earthship addresses six principles or human needs:
- Reduce and even eliminate your utility bills.
- Get ALL of your electricity from the sun and the wind.
- Catch water from the sky for drinking, bathing, cleaning, showering, washing, flushing, etc.
- Contain and treat ALL of the sewage you produce in a healthy and beautiful way.
- Maintain comfortable temperatures in your building ALL year long, in any climate and reduce or even eliminate your heating and cooling bills.
- Some internal food production capability
Monday, April 6, 2020
Hundreds of metro Denver home sellers yank their listings Pandemic causes an unprecedented shift in housing market
interesting article from Denver Post....
An unprecedented number of metro Denver home sellers pulled their listing off the market last month, while thousands went the other way, rushing to list their homes before a major economic downturn made a sale tougher to achieve.
“How quickly our world has changed,” Jill Schafer, chair of the market trends committee at the Denver Metro Association of Realtors, said in comments accompanying the association’s monthly update.
At the start of March, the metro Denver real estate market looked like it would launch into one of ts best spring-selling seasons ever — until efforts to contain the novel coronavirus caused the economy to grind a halt.
Open houses became taboo, and showings became a virtual affair. Mortgage rates gyrated wildly, leaving buyers scrambling. Inspectors and appraisers couldn’t move around as easily. Notaries went into hiding and county recording offices closed, making it harder to register paperwork, something title insurers did not like in the least.
“By the end of the month, we were all wondering what was ahead for us, our industry and our country,” she said.
Sellers pulled an unprecedented 761 listings last month, with 625 of those withdrawals coming in the past two weeks, Schafer said.
Sellers may have been fearful of having strangers turning doorknobs and flipping light switches during a pandemic, she said. And uprooting everyone and everything at a time when the governor has ordered the entire state to shelter in place may have forced a reconsideration.
Some sellers may also be weighing whether they really need that upgrade given a record surge in job losses the state and nation are experiencing. If the paycheck won’t be there, why take the risk?
Even with those concerns, a large number of new listings, 6,663, came onto the market, a 30.2% surge from February’s number of new listings. Buyers closed on 4,296 homes and condos, a 12% increase from February, but down 5.12% from March 2019.
Still, enough was left to push the inventory of homes available for sale to 5,776, a 19.5% increase from the prior month. That’s almost four times the typical inventory increase measured between February and March and the second-biggest jump on record for March.
One explanation for the surge is that some owners, sitting on years of equity gains, may fear price declines are around the corner as the economy sours. Some forecasts are calling for the GDP to drop by 30% or more in the second quarter, and Redfin listed Denver among the 10 metros at highest risk during a coronavirus recession.
But it’s worth noting metro Denver enters this downturn with a tight inventory of homes for sale, unlike the last recession when a much larger number of homes were trying to find a buyer. Many of those were backed with mortgages worth more than the homes.
“People who are thinking about selling a home will probably pull it off the market this spring,” predicted Ralph McLaughlin, chief economist with Haus Inc. during a conference call hosted by the National Association for Business Economics on Thursday.
At the same time, as unemployment spikes, fewer buyers will be able to purchase a home, he said. That should reduce demand and offset decreasing supply. If a coordinated slow down can take place, the market can take a breather and stave off a drop in prices.
The median price of a single-family home sold in March in metro Denver was $487,950, up 4.2% from February and 8.4% from March 2019. The median price of a condo sold was $330,000, a 4.8% increase from February and a 10% gain from a year ago.
One by one, the industry has done its best to work through the numerous problems that popped up in March, even amending standard real estate contracts to allow for a host of COVID-19 contingencies. And while real estate agents were excluded from the governor’s shelter-in-place order, Schafer urged them to answer the call.
“Don’t panic, do your part and stay at home unless your clients need to buy or sell,” she said. “We must all do what we can to stop this pandemic.”
An unprecedented number of metro Denver home sellers pulled their listing off the market last month, while thousands went the other way, rushing to list their homes before a major economic downturn made a sale tougher to achieve.
“How quickly our world has changed,” Jill Schafer, chair of the market trends committee at the Denver Metro Association of Realtors, said in comments accompanying the association’s monthly update.
At the start of March, the metro Denver real estate market looked like it would launch into one of ts best spring-selling seasons ever — until efforts to contain the novel coronavirus caused the economy to grind a halt.
Open houses became taboo, and showings became a virtual affair. Mortgage rates gyrated wildly, leaving buyers scrambling. Inspectors and appraisers couldn’t move around as easily. Notaries went into hiding and county recording offices closed, making it harder to register paperwork, something title insurers did not like in the least.
“By the end of the month, we were all wondering what was ahead for us, our industry and our country,” she said.
Sellers pulled an unprecedented 761 listings last month, with 625 of those withdrawals coming in the past two weeks, Schafer said.
Sellers may have been fearful of having strangers turning doorknobs and flipping light switches during a pandemic, she said. And uprooting everyone and everything at a time when the governor has ordered the entire state to shelter in place may have forced a reconsideration.
Some sellers may also be weighing whether they really need that upgrade given a record surge in job losses the state and nation are experiencing. If the paycheck won’t be there, why take the risk?
Even with those concerns, a large number of new listings, 6,663, came onto the market, a 30.2% surge from February’s number of new listings. Buyers closed on 4,296 homes and condos, a 12% increase from February, but down 5.12% from March 2019.
Still, enough was left to push the inventory of homes available for sale to 5,776, a 19.5% increase from the prior month. That’s almost four times the typical inventory increase measured between February and March and the second-biggest jump on record for March.
One explanation for the surge is that some owners, sitting on years of equity gains, may fear price declines are around the corner as the economy sours. Some forecasts are calling for the GDP to drop by 30% or more in the second quarter, and Redfin listed Denver among the 10 metros at highest risk during a coronavirus recession.
But it’s worth noting metro Denver enters this downturn with a tight inventory of homes for sale, unlike the last recession when a much larger number of homes were trying to find a buyer. Many of those were backed with mortgages worth more than the homes.
“People who are thinking about selling a home will probably pull it off the market this spring,” predicted Ralph McLaughlin, chief economist with Haus Inc. during a conference call hosted by the National Association for Business Economics on Thursday.
At the same time, as unemployment spikes, fewer buyers will be able to purchase a home, he said. That should reduce demand and offset decreasing supply. If a coordinated slow down can take place, the market can take a breather and stave off a drop in prices.
The median price of a single-family home sold in March in metro Denver was $487,950, up 4.2% from February and 8.4% from March 2019. The median price of a condo sold was $330,000, a 4.8% increase from February and a 10% gain from a year ago.
One by one, the industry has done its best to work through the numerous problems that popped up in March, even amending standard real estate contracts to allow for a host of COVID-19 contingencies. And while real estate agents were excluded from the governor’s shelter-in-place order, Schafer urged them to answer the call.
“Don’t panic, do your part and stay at home unless your clients need to buy or sell,” she said. “We must all do what we can to stop this pandemic.”
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