How COVID-19 Affected the Housing Market

The impacts of the COVID-19 virus will be felt for years to come. The shelter in place orders and business shutdowns took a thriving economy and tanked it. It’s safe to say that few markets didn’t feel the effects of the virus, and the real estate and housing market are no exceptions.

How COVID-19 Affects Buyers

To gain a better understanding of how the virus impacted the housing market, the National Association of REALTORS® (NAR) performed surveys to gauge consumer behavior both with buyers and sellers.

Stated by a credit repair Houston specialist, the survey found that interest rates dropped dramatically for buyers. But that didn’t spur people to spend money on purchasing a new home. Once social distancing orders were in place and schools and businesses closed, buyers were less likely to buy. While low-interest rates typically mean an increase in real estate buyers, consumer fear over the future state of the economy. As well as the stock market, as impacted by the virus, kept their wallets closed.

How COVID-19 Affects Sellers

As with buyer confidence shaken due to the economic shutdown, so too, was the confidence of real estate sellers. The NAR’s surveys showed that while 81% of sellers kept their homes on the market as of March 9, 2020, that number dropped by 20% as of March 16.

Also, as the situation with the virus escalated, sellers quickly removed thousands of properties, either temporarily or permanently, from the market. Of those that decided to tough it out and keep their properties on the market.Over 50% of sellers said they were cautious when showing properties to prospective buyers, which meant canceling open houses and restricting the number of showings. Some realtors said they avoided contact with buyers by letting them take a self-guided tour while the realtor stayed in the car until they left. Other realtors limited showings to virtual tours only.

Another factor that is affecting sellers goes beyond the concern over getting sick. Buyers are wary of properties that stay on the market for a long time. And with the current situation of little activity in the real estate market, many properties are lingering too long.

Some relief has come from Real Estate Boards, for example, the New York Real Estate Board decided to eliminate the “days on the market” designation for their listings.

What the Future Holds

While there are some people buying property despite the impacts of the virus, the number is significantly lower than it. It would be thanks to the shelter in place orders and the fears of the virus itself. Many appraisers and inspectors find it difficult, if not impossible, to gain access to homes and government offices, which makes it difficult to close on properties.

Some experts believe that if there’s a significant reduction in the number of COVID-19 cases by mid-July, and the shelter in place orders are lifted around that same time, the real estate market is likely to explode because people will finally feel safe to do business again.