How Is the Pandemic Changing the Housing Market?

The effects of the COVID-19 pandemic have been swift and far-reaching, with the U.S. real estate market seeing its fair share of change and uncertainty. Forced to adapt to shelter-in-place orders, many buyers and sellers are evaluating the situation from home while agents and developers adopt virtual strategies to help their clients. We asked several industry professionals to share their experiences with navigating the market under the strange, new circumstances—and their predictions for the future.

How Has the Housing Market Reacted So Far?

At this point, it seems likely that the usual springtime uptick in real estate listings and sales will be pushed out. Over the past few weeks, around half of U.S. sellers pulled their homes off the market according to Realtor.com, which noted a 47% decrease in year-over-year listings so far in April. As anticipated, total home sales declined around 30% in March, although April figures are expected to show a fuller picture of the impact.

Many agents report that they’re still receiving inquiries, although restrictions on in-person showings and general market uncertainty are slowing the process down. "It has been a very tumultuous time," says Nate Cole, a Los Angeles–area agent. "With California's safer-at-home policy, the market has come almost to a standstill. Nothing can compare with seeing a property in person, so it seems pretty clear that sale activity will be slowed until that is more widely available again."

"While in-person property showings in New York City are currently on hold, interest is not," says Mickey Conlon of Douglas Elliman Real Estate. "Many prospective buyers are using this time to assess their options and reevaluate their needs."

A key challenge for buyers right now may be acquiring a mortgage as banks temporarily tighten lending rules. JPMorgan Chase, one of the country’s largest lenders, recently announced a decision to require borrowers to have at least 20% down and a credit score of at least 700. Other lenders are requiring verification of employment on the day of a loan closing, and applications for U.S. government–backed mortgages now include stricter guidelines. Agents report that most signed contracts are proceeding in escrow as planned, although the new mortgage rules may impact future buyers unless they make an all-cash offer.

How Is the Buying Process Adapting?

For properties still on the market, limits on in-person showings mean agents are using new tools to communicate with prospective buyers. David Parnes of The Agency notes his team’s use of social media to fill the gap. "Digital marketing has become key," he says. "We are using Instagram Live segments or Zoom meetings for virtual tours and property videos to continue our marketing efforts. We are also seeing an increase in interest on our leased properties from clients who are selling a property and need to relocate."

Other steps in the buying process are also adapting to social distancing. For instance, some home inspectors are touring properties alone while the sellers are away, then conducting video calls to review the findings with the buyers. Home appraisers report doing their work without going inside a property, reviewing the exterior and using public records to establish a value. Closings are also proceeding, with some state governments permitting online closings and other groups sitting in separate rooms to avoid large conference-room gatherings.

It’s unclear how long such steps will remain in place, even if other social distancing requirements loosen. Of course, all of these precautions, while slowing down the process in some situations, are efforts to protect the safety of buyers, sellers, and everyone involved.

Is Now a Good Time to Buy or Sell Property?

Ultimately, that depends on your situation and local area. "Patience is key right now," says Demetri Darmos, principal at Astéras, a design and development firm. "It’s difficult to predict how the pandemic will impact the real estate market in the long term."