As the COVID-19 health crisis continues to ravage the world, along with the global economy, it’s not surprising that it’s also sidelining prospective home buyers and sellers.
About 85% of residential Realtors® reported seeing a decline in home buyer interest, according to the National Association of Realtors® Flash Survey: Economic Pulse. About 2,500 real estate professionals participated in the survey, which was conducted April 26–27. Thirty-five percent of Realtors saw buyer interest fall by half—or even more.
“It’s obvious that the housing market is still struggling in this crisis,” says realtor.com® Senior Economist George Ratiu.
“A lot of buyers are coming to terms with the magnitude of the economic damage,” says Ratiu. More than 30 million people have filed for unemployment since this crisis began last month, and more layoffs are expected. “Not surprisingly, you see that in [these] results.”
The lack of buyer interest is particularly pronounced given that spring is usually the start to the normally busy home-buying and -selling season. Low mortgage interest rates often give the market a boost as well. Rates reached an all-time low this week, falling to 3.23% for 30-year fixed-rate loans in the week ending April 30, according to Freddie Mac.
In addition, more than half of residential Realtors, 60%, reported that sellers were delaying attempting to sell their homes or were postponing the process indefinitely, according to the survey.
In addition, about 24% of sellers reduced the prices of their abodes in light of the stunning number of job losses and folks losing additional income.
“There’s clearly a disconnect between sellers still active in the market and potential buyers,” says Ratiu. “Homes that were priced for January 2020, when the economy and employment were still growing, are not likely to sell for the same price in the current downturn.”
As bad as this all sounds, it was worse two weeks ago, when 90% of residential Realtors reported buyer interest was down. Roughly 67% said sellers were delaying sales or pulling their homes off the market. This survey was taken April 12–14 with nearly 2,300 participants.
“Transactions are still taking place,” says Jessica Lautz, NAR’s vice president of research. However, “buyers and sellers should expect it’s going to be a very different experience than perhaps they dreamed of. … There very well could be delays throughout that process, and the transaction will be happening more virtually.”