The National Association of Realtors (NAR) recently conducted a survey of its members entitled, “2020 NAR Flash Survey: Economic Pulse.” Of the 3.4 percent who responded, here are some of the results as it pertains to today’s residential real estate market.
Transaction Required Social Distancing
With minor modifications such as using masks and gloves, 45 percent felt person-to-person interaction was still required while 34 percent were able to complete their transactions respecting social distancing guidelines. Another 17 percent either postponed or cancelled their home searches and sales transactions.
Only 23 percent of respondents reported that there was no change in client behavior while 34 percent reported that buyers had delayed their home purchase for a couple of months and 19 percent said their client’s stopped looking altogether due to concerns about losing their jobs. Another 10 percent reported they were continuing the buying process but were relying mainly on virtual communication to complete the transaction.
Eighteen percent of members cited no change in activity and 18 percent said activity actually increased while 64 percent of members cited a decline in buyer interest and 24 percent reported that their activity had declined by more than 50 percent.
Buyer Expectations of Home Prices
Residential members reported that 70 percent of buyers expected that prices would remain the same or go higher by as much as 5 percent to 15 percent. The other respondents expected home prices to decrease from a few percent to as much as 10 percent.
Similar to the buyer’s behavior, 38 percent of members reported that sellers were delaying their home sale for a couple of months. Seven percent reported clients had decided not to buy or sell indefinitely while 20 percent reported no change in client behavior. Of those working with home sellers with active listings, 92 percent reported that home sellers had made changes to how their clients’ homes were viewed, including stopping open houses or requiring those who enter the home to take appropriate precautions before entering the home.
Sellers Listing Price
Of those members currently working with sellers, 68 percent said that no sellers have reduced the price to attract buyers while 19 percent reported that sale prices were reduced by less than 5 percent. Only 2 percent reported a reduction in sale price of more than 15 percent.
Residential Closing Delays
Of those who are closing residential transactions, 43 percent reported no closing delays. Delays in closing happened for many reasons among them delays with financing, buyers no longer qualifying due to loss of job, home inspections, final walk-throughs, title searches, and in-person signatures.
In summary, buyers can expect delays in the home purchase process and more scrutiny from lenders but should not expect home prices to fall. Sellers can expect a decline in buyer interest, a longer period of time the home will remain on the market and a prolonged closing process but will likely not have to drop their prices.