Why the Housing Market Will Remain Strong Despite Social Distancing

A lot has changed in our world in the past couple of months. We are facing a situation that no one from our generations have faced before. Life is being lived in a completely new way and naturally, people are examining the short-term and long-term implications of these changes. Despite the multitude of changes to our world economy, the real estate market within the United States is showing promising signs that it will weather this storm.

Business is Being Conducted Virtually

The real estate industry is responding to the coronavirus crisis just like the rest of the world - it is adapting. We are seeing many new ways to conduct business while maintaining social distancing. Title companies are performing drive-through closings that allow both buyers and sellers to sign required documents without going into the office. Mortgage lenders are relying on their already-established virtual capabilities for accepting applications and receiving documentation. 

Realtors are finding creative ways of showing properties without having buyers physically present by relying on “virtual tours” and utilizing tools like Facebook Live to conduct open houses. Sellers are opting for “touch free” showings by leaving cabinets and closet doors open.

Buyers Eager to Purchase

Despite the current coronavirus outbreak, buyers are still showing many signs of urgency within the market. Mortgage rates still hover around all-time lows, and those in favorable economic conditions want to buy a home now to take advantage of these rates.

The number of video tour requests for showings has been steadily rising. A recent poll conducted by RedFin showed that many buyers are opting to make an offer on a property sight unseen. They are making offers after seeing properties through virtual tours. Last week 12% of offers made were by customers who had toured the home only by video, up from 6% last week and nearly 0% at the beginning of March. 

Pent-Up Housing Demand

Historically, spring has been the hottest season for real estate. Currently, the number of listings on the market has decreased from last year. However, it is promising that once the social distancing has finished, there will still be a great number of homeowners that need to sell, and buyers who want to move forward.

Before social distancing was implemented, the real estate market throughout much of the country was experiencing low inventory. In many areas new construction builds were not considered essential services, therefore drastically decreasing the number of new builds available for purchase. This will create an even greater shortage of inventory and retain value for the existing homes being listed for sale.

Ultimately, the majority of Americans still feel like it is a good time to buy or sell a property. Although it feels like the world has come to a halt, there are still houses being listed, buyers looking to purchase and real estate professionals ready to help.