I write this on the second day of the federally recommended 15-day social distancing in the Greater Houston Area, including Katy. Many of us are focused on our soon-to-be-bored children staying at …
I write this on the second day of the federally recommended 15-day social distancing in the Greater Houston Area, including Katy. Many of us are focused on our soon-to-be-bored children staying at home instead of school, the challenges of working from home, unfortunate closings of area restaurants and businesses, finding enough necessary food and supply items to get us through and just trying to adjust to this brave new world of isolation.
How has the coronavirus pandemic impacted the Katy Area real estate market?
Today my Katy office held our regular sales and training meeting, with half attending via Zoom, a popular web based online meeting service. There were glitches in the system but I do think we as a society will all get better at this type of communication.
What I am seeing in our market right now is a hint of a slow-down of activity. Not drastic by any means at this point, but discernable. New listings are still coming on the market but not as many as anticipated for this time of year. I believe this is due to many factors: seller concerns for their health, confidence in current work conditions, stock market shock that may cause some temporary paralysis with plans moving forward.
On the buyer side, we are seeing some buyers continue to search for homes and plan their moves. Buyers previously committed to a new job and simply seeing their plans through. Their house hunting and buying timelines may be delayed due to travel restrictions but not halted. Some buyers, who do not need to buy right now, may be holding off to see what the immediate future brings. There has been some comparison to how the market felt right after 9/11, when experienced agents held their collective breath and then cautiously moved forward. New strategies were put in place to help consumers understand and navigate through uncertain waters. *(See message from Lawrence Yun, National Association of Realtors Chief Economist below.)
How buyers look at homes may well change as more sellers’ limit or block showings for health concerns. If a seller has an underlying health concern or resident elderly family members, they may not be comfortable with strangers entering their home and touching surfaces that might lead to infection. Buyers could also have the same concerns when visiting occupied properties. We are beginning to see buyers and sellers seeking additional information about who is coming to see their home or who is living in the property as it relates to health concerns. We have to all be mindful at this time of the Fair Housing Act and that we treat all parties exactly the same when answering these questions from concerned buyers and sellers.
While it is certainly too early and irresponsible to make predictions, it is safe to say that certain price ranges may feel a limited impact. Potential luxury market cooling due to drastically impacted portfolios and current changes in liquidity. Middle price ranges in the Katy Area could be impacted due to the volatile oil and gas prices and potential future layoffs should this become a long-term condition. Entry-level homes pricing may be impacted due to job insecurity and less than robust consumer confidence. However, lack of inventory and the lowering of the mortgage rates may help consumers overcome some of their buying fear. Savvy investors often jump into and take advantage of market uncertainty which could bolster this market sector. Again, like other times of uncertainty, the market tends to rebound after the source of the uncertainty is removed or resolved. Long term, no one at this point knows but we are optimistic that this is a temporary shift and not permanent.
Lenders are very busy: trying to calm consumers currently trying to to close on time, potential buyers nervous about purchasing, buyers mistakenly confusing the drop in the Fed rate with currently mortgage lending rates and those trying to refi to capitalize on the historically low rates.
Transactions are still moving forward to closing but with a few unexpected challenges. Appraisals, required for transactions with third party funding, may slow down closings simply as some appraisers stay at home and cannot complete reports in a timely manner. Another function is fear of physically going to the closing office to sign documents to close. Many title companies have abilities for remote closings (notary traveling to signers) and are working on electronic signing of all but a few crucial lender-required “wet” documents. Hopefully, this might encourage both title and lending industries to reevaluate how we can move into this century with a fully digital closing experience, not just in times of national disaster. Please note that some states are instituting total mandatory shut downs so this could include closings.
If you have a property currently listed, you may wish to contact your Realtor to discuss strategies to keep you and your family safe. If showings are slower than usual, this is to be expected. You are basically “open for business” when many other businesses are temporarily shutting down. This is a fluid situation and requires patience and understanding from everyone. Your future buyer may be at home trying to keep safe, too and will rely more on the digital home search or virtual open houses rather than a physical tour, which is why great merchandising or marketing has never been more important.
Be safe, be kind and carry on Katy!
For more information visit the NAR website: https://www.nar.realtor/coronavirus-a-guide-for-realtors
Christi Borden is a realtor with Better Homes and Gardens Gary Greene and previously served on the board for the Houston Association of Realtors for nine years.