Despite the challenges and obstacles, the residential real estate market was actually doing fine for most of this year’s first quarter.
But then, the novel coronavirus happened, putting a halt in its progressing motion. Now, the virus is also threatening the rest of the real estate markets throughout the country during this time which is supposed to be the peak of the buying season.
The first two months of the year was a good start. The sales have actually jumped up. But that doesn’t matter anymore as the sudden shift of things has come along with the threats of the coronavirus.
With home quarantine and other precautionary measures in place, open houses and personal house viewings were also put on hold—which is a big problem because no one would be buying a property without seeing it. Depending on how long these outbreaks last, the sales could drastically drop in the second quarter by more than 70% in comparison to the same period in 2019.
Based on the data gathered by the experts, the first quarter of 2020 was close to turning the corner. Sellers have actually started to become serious in negotiating as indicated by the higher number of price declines.
In February alone, the number of contracts signed for a single month was a record high in many years. This was a sign that the market was rocketing up.
However, the virus issue persisted. In March, the Federal Reserve has lowered interest rates down to almost zero to prevent the U.S. economy from plummeting down as the government’s preventive measures against the pandemic have in return closed businesses and establishments, severing the markets. Now that Americans are in a stay-at-home order, the early indicators of progress are deemed meaningless.
Honestly, nobody had seen all these coming. It was so sudden we were all caught off guard, and the whole world too. It was a factor that came in so late in March and has already caused so much. Looking at the way things are going, it seems to be leading into a catastrophic ending.
Contracts and closings are not reflected in a real time manner in the market statistics because the paperwork takes weeks and months before they get into the system. But the signs of the decline are already noticeable.
As of the end of March, the number of listings have already gone down compared to the same time last year. And thousands of listings were already taken off from the market.
Also, real estate agents are perceived as nonessential workers. Needless to say, they are banned from doing in-person showings which is one of the greatest obstacles now. Even if a buyer agrees to buy a house without seeing it, many parts of the process toward closing requires physical appearance and contact. Current technology trends such as video calls, virtual tours, tours with robots and others are good but not good enough to replace a professional real estate agent on the job of answering clients questions, reassuring, and just adding a nice personal touch of being human to the business.
Before the coronavirus scare, 2020 was supposed to be a strong recovery year for the market. Now, it has spread a nationwide uncertain feeling.
Even the luxury market with millions of dollars contracts, is also greatly affected. The drop in sales compared to last year was really a massive difference. Buyers have also become more aggressive pushing for price cuts.
Before the coronavirus outbreak, you could say that the resurgence of the market was a tough battle won since the 911 terrorist attack in 2001 and the bankruptcy of a huge global financial services company in 2008.
The magnitude of the impact of this current health crisis will greatly depend on how long it will be contained and how quickly the economy recovers. Agents are hoping that the pending demand from the months of lockdown will carry over into the fall and winter seasons which are usually slower buying months of the year.
While everything is left floating in uncertainty right now, once the stay-at-home order is lifted up and things begin to move on, buyer demand will soon start to surge. There is certainly hope.
If you really need to sell your house now, you still have an option. Go for a reputable “We buy houses fast Los Angeles” company like Mrs. Property Solutions. They take this crisis as an opportunity to help out people who needs to sell their house as quickly as possible. Mrs. Property Solutions buys properties in cash all throughout the year, in any condition and in any situation.