Tech-powered real estate brokerage Redfin is offering a virtual home tour tool and discouraging its … [+]
Getty
It will be another couple of weeks until the National Association of Realtors releases data on February’s pending and existing-home sales, statistics that could cue to the potential impact of the coronavirus on real estate selling and purchasing. Yet, tech-powered real estate brokerage Redfin says the first effects of COVID-19, the disease caused by the virus, are starting to ripple through the market.
On March 4, Redfin CEO Glenn Kelman published remarks of anecdotal observations by Redfin agents in Seattle, the biggest city in King County, Washington, where most COVID-19 deaths in the United States have occurred, and a few other cities across the nation where the disease is emerging.
“In Seattle, the reaction has been strongest among sellers, who worry about strangers entering their homes; this only started on Monday [March 2] morning,” Kelman wrote. “Three canceled their listings, and at least one buyer canceled an offer.”
Redfin chief economist Daryl Fairweather resides in Seattle, where the brokerage is headquartered. She says that people stocked up on groceries over the weekend and are working from home.
“I think that’s just reality starting to set in and it’s setting in very quickly, especially for people here in the Seattle area, of how bad this could potentially get,” Fairweather says.
Some shoppers in Tampa Bay, Florida and San Antonio, Texas are for now suspending their home search, Kelman stated in his article. Meanwhile, in Portland, Oregon, where three cases of COVID-19 were reported last week, a few customers requested to meet with real estate agents in private rather than in public spaces.
Different reactions by different people
That type of precaution, however, seems to be an isolated behavior on the backdrop of the national housing industry, where consumer sentiment appears to remain largely positive. Washington, DC, Boston and Chicago are three metros Kelman singled out for reporting “strong demand.”
“Some buyers are looking at how low mortgage rates are and thinking now’s the time to lock in a rate and buy a home,” Fairweather says.
Reacting to the stock market volatility prompted by the coronavirus outbreak, the Federal Reserve slashed interest rates by half a percentage point on Tuesday.
For the week ending today, March 5, the 3o-year fixed-rate mortgage averaged 3.29%, according to Freddie Mac. A slump from last week’s 3.45%, the rate is at “the lowest level in its nearly 50-year history,” according to the mortgage buying enterprise. But even in late February, as fellow Forbes contributor Brenda Richardson reported, mortgage rates in the U.S. dipped on the fear of the disease quickly spreading across the country.
At the same time, though, the swings of the stock market, which has plummeted and soared several times now because of the coronavirus and the authorities’ official response to it, may keep some home shoppers from purchasing.
“We’ve heard stories from some buyers who are looking at their stock portfolios and getting skittish about committing to buying a home,” says Fairweather. “It’s definitely impacting people’s decision making but it is impacting different people in different ways, depending on whether they have a lot of stock or whether they are more concerned about that mortgage payment.”
Precautionary measures for agents, sellers and buyers
Kelman, nonetheless, announced several measures Redfin is implementing to ease buyers and sellers who are worried about COVID-19. As of yesterday, the agency rolled out on-demand video tours that home seekers can request from their agents. Those who use the brokerage’s mortgage and title services can also close on a home completely electronically.
“If you’d rather not meet others except where necessary, we can let you see a home, bid on it, and close on it, all virtually,” Kelman said in his remarks.
More mundane efforts, which could also serve as good advice for sellers and buyers, include instructing agents not to shake hands.
“We’ve advised our agents not to shake hands with customers who would rather not have to worry about contact with new people; please don’t take it personally,” Kelman wrote.
Cleaning frequently touched objects and surfaces in residences serves as another piece of advice. Redfin is asking its agents to have cleaning supplies available for private showings so that representatives of other real estate agencies can use them too.
“We can adjust in some ways to keep the housing market moving along, even if people are nervous about exposure,” Fairweather says.
She adds, “I think we just have to pay attention to whether this outbreak gets worse or not. And if by the summer, things settle down, it will probably just move a lot of activity into the summer and the overall picture for the year won’t be affected that much.”