This seismic shift in how we live our lives seems to change by the hour, yet time also seems to stand still. The stock market is like a Six Flags ride; thousands of businesses have either temporarily or permanently closed; and the number of unemployment claims breaks its own record seemingly each week.
As a real estate professional, I am asked daily how this has affected not only property values, but also the actual enterprise of conducting the business of showing and selling homes.
First, we don’t really know how COVID-19 has affected property values simply because there’s a lag in that data which typically doesn’t show up for months. Prior to mid-March we were enjoying a brisk and healthy spring in Atlanta, with home values holding strong in most sectors (with the exception of some of the higher-end categories). Fannie Mae is predicting a 10 to 15 percent drop in home values this year, but those are national projections and real estate is a very local thing. And fortunately, Atlanta tends to generally have stronger numbers than the national average, all things being equal.
Real estate statistics, though, are directly tied to employment numbers, so as that story continues to be told we will see a clearer picture as it relates to home sales. BUT this is not like 2008 as some have suggested. In 2008, the real estate market was the actual cause of the economic collapse. It’s a bit different now and home sales are expected to recover strongly depending on how long this lasts, which is, of course, the question nobody can answer.
Are there still buyers out there? Absolutely. Many industries have not been affected and those jobs remain secure. Likewise, this is traditionally the time of year people move who have been transferred, and they are still in the process. Or perhaps it’s someone who sold their home prior to COVID and they still need to find a new property. Or maybe they need to get their kids in a new school district prior to fall (remember that thing called school?). One thing is for sure though, there are no “tire kickers” in the mix. If someone wants to see property in this environment, they are definitely serious.
But it would be disingenuous to say the buyer pool is still strong. It has definitely shrunk and has become more of a buyer’s market. Showings are down as well as homes being put under contract, especially in the luxury home category where jumbo loans have been dropped by many lenders and the terms have become often brutal.
In addition, the actual process of showing homes is a new world. Sellers are being asked to leave all lights on and interior doors open to minimize the need for buyers to touch surfaces. And likewise, home tours involve masks, gloves, booties and disinfectant wipes. Many agents are providing video tours as well, although it is not eliminating the need for buyers to eventually do a physical visit.
Some sellers who are elderly or have underlying health issues have completely taken their homes off the market as they understandably don’t want strangers in their home, nor do they want to leave for showings.
We are in uncharted waters in every corner of our lives, and real estate is no different. Each day brings new information and circumstances and all we can do is have patience, be smart, pray and make good decisions. Now more than ever, though, if you are seriously considering selling or buying, speak with a real estate professional you trust. We are here to help you make wise decisions and our advice is free!
Jimmy Baron is a top 3 individual agent with Keller Williams First Atlanta, top 5 percent with Atlanta Board of Realtors, a member of Keller Williams Agent Leadership Council and Keller Williams Luxury International.