Spring housing market faces challenges with stock market declines, coronavirus

WAYNE, Pa. - April 29, 2020 - PRLog -- The first two months of the year have been hot when it comes to home sales in Philadelphia and across the region but the onset of the coronavirus has real estate agents cautious about what the spring selling season might hold.
Though this is a key period for buyers and sellers of houses, agents are already seeing deals fall through because of the nose dive in the stock market and more questions than answers when it comes to holding open houses.
A just released survey by the National Association of Realtors shows that 16% of participants said buyer interest has decreased due to coronavirus though the vast majority at 78% said it hasn't changed. In light of the coronavirus, the association anticipates a 10% reduction in sales over the next month when compared to the same period a year ago.
January and February were ahead of last year and the market is "hot," said Joan Docktor (https://www.bizjournals.com/philadelphia/search/results?q=Joan%20Docktor), president of Berkshire Hathaway HomeServices Fox & Roach. And, so far the virus hasn't slowed sales.
"Homes are getting multiple offers and houses have been flying off of the shelf. Even high-end houses are getting offers and selling and now comes this," Docktor said. "I am getting questions about open houses and how do we sanitize. We have had a seller refuse a showing from a relocation buyer. Everyone wants to be cautious about people coming through their homes. If you are buyer, what do you touch and not touch?"
Year-to-date home sales through February in Greater Philadelphia are up 8% compared to the same period in 2019, according to data provided by MarketStats by ShowingTime based on listing activity from Bright MLS. Nearly 9,600 home sales have closed. The median sale price of $237,000 in February is up 8% $218,500 in the same month last year.
Mike McCann (https://www.bizjournals.com/philadelphia/search/results?q...) of Keller Williams in Center City said he had four listing appointments Thursday and no one cancelled. He's telling agents to wear gloves, keep sanitizer available and elbow bumps for greetings.
While business is so far normal, the plunge in the stock market (https://www.bizjournals.com/philadelphia/news/2020/03/09/...) has meant some deals have cratered. "We did have someone back out of buying an expensive property because they lost so much in the stock market," McCann said.
Docktor has also been told of a high-end sale not going through because of worries over the decline in the stock market.
Brett Furman (https://www.bizjournals.com/philadelphia/search/results?q=Brett%20Furman) of Re/Max Classic in Wayne said his year-to-date activity has been the best in his 33-year career. The same issues that have plagued the residential market for the last several years — not enough houses to sell — continues. "I have sold through almost all of my inventory," he said.
So far, all of his firm's pending transactions are still scheduled to go through but Furman is predicting that open houses will be curtailed in light of the coronavirus and its potential to spread. "Open houses will quiet down or disappear," he said. "One-on-one showings will continue."
For Furman, that also means tapping technology to post more video and three-dimensional presentations of homes that are up for sale so prospective buyers don't have to physically visit a house but can still take a virtual tour.
"The technology we use will be even more important," he said. "We have 3-D views we create for every, single property. We have on average 754 views on every virtual 3-D we create for a home. That shows you the public is already going there and I think those statistics will rise."
On the bright side, residential real estate agents are preparing for an onslaught of refinancings because of historically-low interest rates. And, there's a sense that with the volatility in the stock market, investors could turn to real estate as a safe haven.
"The coronavirus has caused people to get the jitters and when that happened during the last recession, they put their money in real estate," Docktor said.