There’s been a lot of speculation over how the COVID-19 pandemic will impact the real estate market. Just Google it – for every market there’s a prediction about whether the housing market will experience a similar freefall as the Dow Jones. The latest Housing Market Index (HMI) readout from March 4 fell two points, indicating a bit of stagnation, but the data was taken before the COVID-19 crisis really hit the United States.*
The uncertainty of how COVID-19 will impact the United States looms over buyers and sellers alike. Buyers don’t know if the shutdowns across all non-essential businesses will affect their jobs – or whether they’ll have one to return to. Lower interest rates are persuading many sellers to refinance. Inventory is still low on the Main Line and in Philadelphia. A week ago, I had three home bids fall through due to huge bidding wars on existing homes.
I find our calls have slowed and nearly ceased on both the sales and rental side. I’m not out showing 5 or 6 houses every day. But we are still getting people who are looking for housing. “We need to move next month. Are you still doing showings?” they ask. My buyers who are relocating still check the market from a distance, looking for a move-in ready house. And you can bet that my investors are still hawking the market and checking out individual neighborhoods, looking for a deal.
The housing market for buying and selling is still tight, and I think as long as interest rates stay where they are, the market will continue to be competitive. New homes do continue to come on the market every day. Havertown is especially booming, while Ardmore has one of the lowest inventory of all the Main Line neighborhoods at an entry-level price point of $400,000 or less.
That’s not to say it’s business as usual. Among Realtor®s, COVID-19 has certainly changed the way we go about our days. I’m finding that “virtual tours” I hold with clients via video calls for homes are very useful, and other Realtor®s are using virtual tours for open houses to drive traffic to their listings. We don’t shake hands, and I’ve stocked up on gloves for opening doors, touching surfaces, etc. I also wash my hands whenever possible and keep hand sanitizer in my car. When I’m not showing houses or previewing homes, I’m sitting at my computer practicing social distancing – Finn, my dog, loves it.
The spread of COVID-19 will undoubtedly have a far-reaching impact on the housing market. How severe the effect will be on the spring market remains to be seen. For now, those of us at Wayne Realty and REOD Corporation, our sister rental management company, are doing our best to limit the spread of COVID-19 while serving our clients and our tenants. We’re family-run and are doing our part to take care of our community.
We wish everyone good health and stability in this time of turbulence and uncertainty. This too shall pass, and we’ll weather the storm until it does.
*Edit 3/20/20 @ 5:36 PM: After the time this blog post was written, Governor Wolf ordered all Pennsylvania businesses that aren’t “life-sustaining” to close until further notice. The order “does not apply to virtual or telework operations (e.g., work from home), so long as social distancing and other mitigation measures are followed in such operations.”
It is the author’s opinion, as well as the opinions included below, that this order by the office of Governor Wolf will severely impact the economy, and has already done so as indicated in the linked article. In the past 48 hours, the Pennsylvania Association of Realtor®s published a survey validating the author’s perception that homebuyers are scaling back from the housing market. Sellers have also decided to hold many listings and cancel open houses until the effects of COVID-19 have dissipated. The author will update with additional information as the story develops.