What traditionally is an active spring housing market will likely be dampened by the coronavirus outbreak and the resulting Stay at Home and Shelter in Place orders placed by authorities in most states and cities in the country. According to a National Association of Realtors survey, Realtors nationwide expect a slowdown in spring real estate activity, but many are hopeful for a post-pandemic market rebound.
NAR's Economic Flash Survey, conducted April 5-6, 2020, found majority of Realtors believe buyers and sellers will return to the market as delayed transactions once the health crisis ends. Nearly six out of 10 Realtors (59%) surveyed said buyers are delaying home purchases for a couple of months. A similar share of Realtors (57%) said sellers are delaying home sales for a couple of months. Due to the outbreak, 90 percent of members surveyed said buyer interest declined and 80 percent of members cited a decline in the number of homes on the market.
"Home sales will decline this spring season because of unique economic and social consequences resulting from the coronavirus outbreak, but much of the activity looks to reappear later in the year," said NAR chief economist Lawrence Yun. "Home prices will remain stable because of a pandemic-induced reduction in inventory coupled with less immediate concerns over foreclosures."
Technology is playing a vital role as the real estate industry adapts to the new reality of managing deals virtually with social distancing directives in place. Realtors surveyed said the most common technology tools used to interact with clients are e-signatures, social media, messaging apps and virtual tours.
Almost three in four Realtors surveyed (72%) said sellers have not reduced prices to attract buyers. Conversely, more than six in 10 Realtors (63%) said buyers are expecting a decline in home prices as they sense less competition in the current environment.
Mary Kay Groth, president of the Silicon Valley Association of Realtors, believes home prices will hold steady in the afterwards of the pandemic. "Silicon Valley's market was robust before the pandemic. I believe prices will hold their own after."
At a first-ever Facebook Live session conducted by NAR last week for its 1.4 million members, Yun summarized the market outlook for the next few months as volatile, stating all economic data "will be completely off the charts," with a GDP that could be minus 20 percent. Yun noted "the decline will be quite sharp, but the rebound will also be quite strong." Since the second quarter of the year spring buying season was lost, the market may not fully catch up, "but one more certain item is home prices should remain relatively stable."
NAR president Vince Malta said while NAR provides guidance that follows CDC guidelines, stricter protocols placed by state and local officials must be followed. The SIP orders for the counties of San Mateo and Santa Clara recently clarified certain essential real estate business that may take place with proper social distancing protocols. In-person showings may be conducted if all county rules are followed, but under no circumstance are there to be more than three people at a property, including the Realtor. If a home is currently occupied, there are to be no onsite visits, showings, etc. Activities like open houses, personal handing out of flyers or their house-to-house distribution, photography, staging are not classified as essential.
Groth said SILVAR constantly reminds its members who are engaged in real estate on the Peninsula and in the South Bay, to heed the SIP orders. "We at SILVAR take the health and safety of our members and their clients seriously, so we continually remind our members to follow the regulations. Each day that passes brings us one day closer to the SIP guidelines being lifted," said Groth.
The Silicon Valley Association of REALTORS® (SILVAR) is a professional trade organization representing over 4,000 REALTORS® and Affiliate members engaged in the real estate business on the Peninsula and in the South Bay. SILVAR promotes the highest ethical standards of real estate practice, serves as an advocate for homeownership and homeowners, and represents the interests of property owners in Silicon Valley.
The term "REALTOR®" is a registered collective membership mark which identifies a real estate professional who is a member of the National Association of REALTORS® and who subscribes to its strict Code of Ethics.
Variations of this article have appeared in local area newspapers.
For further information, please email or call the SILVAR office at (408) 200-0100.