I know what you’re thinking, “not another COVID-19 blog.” Understandable, though as industries across the nation face impending challenges due to the pandemic, these unprecedented times call for unprecedented measures to remediate further business interruptions.With economic impacts intensifying across the nation, the real estate industry has been quick to make changes and adapt to current social distancing guidelines.
With the personable, interactive nature of real estate, it is imperative for the industry to adhere to state guidelines and minimize face to face contact. State guidelines are changing week by week and the National Association of Realtors (NAR) has created resources on new guidelines to support members in navigating market conditions. The table below reveals states that recognize real estate as an essential workforce in the NEEP region (as of 4/15/20).
Recent housing market data reflects how the ongoing pandemic is playing out in the United States. Zillow, one of the go-to online real estate portals in the nation, stated that its portal traffic was down 30 percent compared to 2019 traffic. The Warren Group, New England’s leading source for real estate data, reported on a recent webinar that the March market was on track to be the best in years before it was thrown a curveball. In April, the Warren Group reported a 52 percent decline in home sales in Middlesex County, Massachusetts, the most populous county in New England that includes the Greater Boston area. Also, the New Hampshire Association of Realtors conducted a survey on how COVID-19 is affecting members’ jobs.
- 63 percent of realtors reported at least one buyer delaying putting their home on the market
- 51 percent of realtors postponed listing new homes on the market
Homes are being taken off the market, open houses and appraisals are being cancelled, listings are being postponed, and buyers are delaying their home searches. Sellers and buyers are pulling back though demand is not lost, but instead postponed. From a record-setting first quarter to a dramatic decline in the market perpetuated by COVID-19, there is a massive slowdown in the market. Much of it can be attributed to overall reluctance from both buyers and sellers. Perhaps sellers are nervous about letting potential buyers and real estate professionals into their homes. Maybe it’s because buyers are increasingly pulling back due to job loss, shrinking investments, or other economic hardships. Whatever the reason – or combination of reasons – additional resources and tools are needed to help navigate housing options and increase confidence and optimism. Once consumers regain confidence in their health and employment, December could shape up to be the new spring market.
Response to COVID-19
In times of crisis, innovation and adaptive leadership can pave the way for tackling pre-existing and ongoing problems. The real estate industry has shown its ability to navigate various processes to adjust to new ways of doing routine things.
- Going Virtual: Virtual tours and open houses are growing and enabling buyers and renters to continue their searches. Redfin saw a 494 percent increase in requests for 3D virtual tours! There are also opportunities to offer virtual trainings to real estate professionals for continued educational credits during their downtime.
- Remote Notaries & Closings: There are now a number of states allowing remote notaries, and NAR is currently supporting legislation to allow this to continue nationwide. Flexible closings are increasingly occurring through car windows, and sellers and buyers are signing on different days.
- Drive-By Appraisals: The Federal Housing Finance Authority has set out new, temporary rules that allow drive-by and desktop appraisals for loans that are backed up by the federal authority.
- Recorded Inspections: The National Association of Certified Home Inspectors is advising inspectors to record their work and share with clients or use video platforms to live chat with clients.
How HELIX & Energy Estimator Can Help
After spending extended periods of time in homes and apartments during quarantine, buyers and renters may be more curious in understanding the efficiency of potential homes and the operational costs. Home Energy Labeling Information eXchange (HELIX) facilitates the consolidation of energy data in a central repository and makes it available to the real estate market. When HELIX is integrated into a local MLS, this opens up the opportunity for real estate professionals to have this information to better market and value homes.
With customers spending more time at home, it is very likely their energy consumption has increased and has revealed comfort issues at home, creating an opportunity for virtual energy audits leading to suggested energy efficiency measures, which is the best way to control increased usage costs and newfound comfort issues. Energy Estimator - Powered by HELIX & Clearly Energy is built off HELIX and ClearlyEnergy’s automated energy modeling software to pull information from publicly-available tax assessor databases and create a cost estimate to provide homeowners with a first look into a home’s efficiency. Energy Estimator takes that public data and creates a customized report of recommended actions that homeowners can use the tool to reveal savings opportunities. In turn, the tool provides highlighted measures and improvements that could add value to the home, streamline the selling process, and allowing real estate professionals to effectively market energy efficient homes.
Looking Into the Future
COVID-19 has been a catalyzing event to examine how various types of services might be done virtually. As we have adapted to social distancing and working from home mandates, this shift in the real estate industry is likely to result in long-term productivity for both buyers and sellers by offering new ways to streamline their work and home searching efforts. Currently, industry players are impacted and will need to adapt to new, emerging trends to stay afloat. With the market impact, NAR suggests buyers remain calm and wait for housing demand and supply to return and sellers avoid lowering home sale prices.
Real estate’s real problem is to decide whether these changes that came about during the pandemic can positively impact the market in the long run. The market can reinvent itself by emerging from this disruption with a move toward increased virtual services. This is not to say keep 100 percent of the industry online as homebuyers are unlikely to buy a house without stepping foot in it, but offering the option to reduce in-person processes and make more efficient use of their time. Real estate has been hit hard before, but it’s about how hard will they absorb the blow to keep moving forward. The industry may have been thrust into temporary shifts but can turn them into permanent positive changes.