In Your Own Words: Impacts of COVID-19 on the Real Estate Industry
April 8, 2020
Each week, Virginia REALTORS® has been conducting a survey of members to better understand what it is like on the ground in the midst of the COVID-19 pandemic. Overall, 90% of members say their business has been negatively impacted by the coronavirus, with more than half of respondents saying they are postponing listings and nearly two-thirds saying they have buyers postponing their home search.
The statistics from the surveys are enlightening, but survey respondents also had an opportunity to provide their thoughts in an open-ended question. Below are some of the key takeaways from those comments.
Many Virginia REALTORS® work with members of the military to buy, sell, and rent homes. REALTOR® members have found that business has been impacted as a result of restrictions on military personnel.
“Several buyers are military. Military has instructed them to cease all external contacts. Home searches suspended.”
“Another [contract] delayed indef[initely] due to government stopping military transfers.”
“Active military clients transfer papers are on hold and cannot buy at this time.”
“Military deployment, and travel restrictions prevented closing of existing business and the pursuit of new business.”
In some markets, there has been a more notable impact on the higher-end of the market. On the flip side, some Virginia REALTORS® are reporting that lower-priced homes continue to sell quickly.
“Current transactions are closing, [but] higher priced homes on market are getting less showings, investors more hesitant to commit, no new leads coming in. “
“I’m busier than before because of buyers wanting to take advantage of the increasing interest rates for fear the increasing rates may price them out of the market. Home inventory in the $250,000 and below market seems to be moving so fast with multiple offers!”
REALTORS® in Virginia are increasingly noting that delayed appraisals and low appraisals are making it harder to close transactions.
“Had appraisal come in extremely low based on what impact the coronavirus will have on the future of the economy. Extremely unreasonable appraisal result that will kill the transaction. Working to get it reevaluated.”
“Low appraisal resulted in cancelled contract.”
“Showings slowing down, appraisals taking a lot longer.”
Virginia REALTORS® also report that buyers have been having difficulty getting financing, with lenders requiring more stringent qualifications.
“Buyers having their pre-approvals pulled due to new FHA & VA guidelines with credit scores, no manual underwriting, and debt-to-income ratios.”
“Had two pre-approved FHA buyers no longer qualify due to guideline changes and loans denied.”
“USDA financing stipulations with multiple vendors have raised the qualification credit which has impacted qualification USDA clients.”
While we have not seen an overall trend in lower prices, some Virginia REALTORS® are reporting that COVID-19 is leading some sellers to lower prices to attract buyers.
“[S]eller wants to drastically reduce the price of home for sale.”
“Condo listing is dead in the water although priced lower than last comp that was under contract before March 13 announcement of national emergency.”
The number of people who have filed for unemployment benefits in the past two weeks has been staggering. Some REALTORS® in Virginia are reporting that job losses have begun to impact sales transactions, though the bigger impact has been among renters.
“Received a call from a buyer today. Closing on April 17th. He received word that his company is cutting everyone’s pay by 10% and they laid off 140 employees. He wanted to see if he could get out of the contract, not because he can’t afford it now…. he’s just scared of the future.”
“Buyer on my listing had financing collapse since he lost his job due to COVID-19.”
“My client owns a nail salon in Maryland. He was a couple of days away from closing in March when his bank declined his loan last minute until his nail salon re-opens to business. He had to temporarily close business as it is a non-essential business.”
“Some rental property tenants have come forward—losing employment and cannot pay rent.”
“Tenants are losing their jobs and calling in reporting they aren’t going to be able to meet their rent payments… Less people are looking for rentals.”
Virginia REALTORS® are reporting some dramatic changes in how closings are handled as a result of COVID-19.
“Closings are much different than I’ve seen in nearly 25 years. My buyer sat in her car and I sat in mine, outside of the attorney’s office. Documents were brought to her to be signed in the car. This was just a week ago. If this is what it takes to keep people safe, then this is what it takes.”
“[C]losings have been stressful for me since we can’t be present for our most needy clients, the first-time homebuyers, and I had a senior couple close this week… Thanks to great settlement companies, both went off without a hitch.”
In general, Virginia REALTORS® report making changes necessary to keep themselves and their clients safe and health during this time. Precautions, such as face masks, and new ways of communications, such as Zoom calls, have become the norm for many REALTORS® across Virginia.
“This is usually a quite busy time at my office…. Now it is just a quiet time. Most sellers do not want any traffic through their homes, even with agents and buyer clients using recommended precautions, and few wish to make offers based on the economic uncertainty.”
“Only showed vacant homes, with gloves & mask, keeping social distancing.”
“Sellers requiring ALL persons entering their property to have mask, gloves and disinfectant. Our Company implemented this procedure in March 2020.”
“Learning NEW ways to attempt to still conduct business. Crazy amounts of ZOOM calls.”
“Got a house under contract with video tour using Zoom.”
“I have had Zoom meetings and many text and email touches with clients. Thankful I know technology! Stay well!”
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