Streets may be quieter these days and open houses are on pause, but as people retreat inside to do their part in keeping the community healthy, they’re bringing their home search with them.
“Our online traffic is way up, more people are at home and have more time to look at properties,” says Mark Pietig, an agent with RE/MAX Lakes Area Realty in Nisswa, Minnesota. “We have not seen a slowdown in sales at all.”
Prior to the coronavirus pandemic, the U.S. real estate market showed every indication of heading into another strong spring market. Many buyers who had spent the previous months or even years preparing to buy a home this spring probably share the same question: What now?
According to Pietig, there’s still opportunity to buy a home this spring or summer, but working with an experienced agent has never been more important.
“We are fully capable of adapting to a new environment,” Pietig says. “Accommodating a new style or approach is something experienced agents, like RE/MAX agents, are great at.”
Preparing for Every Situation
A real estate transaction has always been complex – and even more so today. Many buyers are wondering how they can possibly plan for anything in 30 days, let alone closing on a home, when even the world’s top health experts are unable to predict when a sense of normalcy will return. The key for agents and other professionals is to adjust their business accordingly.
Agents are taking this into account, and while Pietig says he currently hasn’t seen a change in buyer timelines, steps are being taken to prepare for longer contingencies.
“As long as you’re working with quality agents, you’re not going to see any delays,” Pietig says. “If anything, there’s more collaboration between buyers, sellers and their agents than ever. Everybody truly has to work together to get a transaction done.”
John Manning, Owner and Managing Broker of RE/MAX on Market in Seattle, says the local MLS (the primary listing service of homes) has taken it a step further to help protect clients from the unexpected.
“They took an extraordinary step – they put together a ‘force majeure’ addendum to include in contracts.”
A ’force majeure’ is a legal term often referred to as, quite frankly, “an act of God.”
“It essentially allows our contracts to stretch as a result of unforeseen circumstances,” Manning says. “Let’s say we have a closing next Tuesday and we find the county recording office is closed because of staffing. This addendum allows for an extension of the closing, so we don’t have people refusing to leave their homes or ending up homeless because they can’t move into their new property.”
Opening Up Opportunities in a Competitive Market
Even with contingency plans in place, many buyers are putting their plans on hold while they wait out what the next few weeks could bring. At the same time, sellers are continuing to list their homes.
“We’ve been seeing more of an increase in new listings over the past few weeks, which is providing more opportunities for buyers,” Pietig says.
But Pietig doesn’t expect this to be a permanent reprieve.
“In the grand scheme, this isn’t going to last forever,” Pietig says. “You could remove a third of the buyers from our market here, and we would still have a seller’s market. Right now we have pent-up demand from earlier this spring with some people deciding to hold off until they’re comfortable again. This will mean increased competition down the road.”
For the next few weeks, current buyers could find more options available in their price range, and score a deal while others are sitting out.
Buying in a Time of Uncertainty
One thing has not changed: It’s impossible to predict what the real estate market is going to do next. But that hasn’t stopped buyers from trying. Manning says over the course of his career, he’s found that homebuyers tend to move in groups.
“What tends to happen is buyers get spooked and they all rush out together, and they all wait together,” Manning says. “They say they’re going to buy at the bottom – but they don’t know where the bottom is.”
Once prices appear to be moving up, all the buyers that were on the sidelines rush back in, Manning explains. Competition – and home prices – end up right back where they started.
Pietig advises homebuyers to focus on their personal goals of wanting to own a home, and not worry about trying to time the market.
“If we look at things day to day, it’s not going to feel like the right time to buy,” Pietig says. “I would advise people to take a long-term approach and don’t get caught up with the short-term mindset.”
More importantly, stay positive as you navigate the new process with an agent.
“I know right now people could use a little nudge saying that it’s going to be okay,” Pietig says. “If you wake up each day and focus on the good in life, you’re going to be fine.”