Uncertainty and worse in potential homebuyers' economic lives is pressing the brakes harder on the listing and selling of homes across America.
According to the latest NAR Flash Survey: Economic Pulse by the National Association of Realtors (NAR), 90% of the trade group's members are seeing a decline in buyer interest, and 44% of them said that decline is by more than half.
That 90% is nearly twice the number of Realtor respondents who reported a decline in a similar poll taken in mid-March.
This survey was conducted among a random sample of 86,669 NAR members on Sunday and Monday, April 12 and 13, and garnered 2,291 usable responses with a margin of error of plus or minus 2.05%. Ninety-two percent of the respondents said that the majority of their business is residential, and 81% said they were in a local market where there were presumed or confirmed cases of COVID-19.
Most of the country is under stay-at-home orders except for essential business, and although real estate has been deemed essential in many areas, social distancing is having an effect on the business.
Virtual tours and real delays
For instance, according to the NAR, the median amount of homes toured among those buyers who did put in a contract was three, whether that tour was digital or live, and 25% of them did not physically see the home at all before committing. That compares to a median of nine homes toured before a contract reported in the trade group's 2019 Profile of Home Buyers and Sellers.
Closings also are being compromised. Only a third of the agents polled this week reported no closing delays, with the rest citing appraisals, home inspections, financing, and signature issues as hang-ups.
Sellers also are showing reluctance amidst the pandemic. The NAR survey found that 83% of members have seen fewer homes on the market, with 31% of them putting that decline at between 10% and 30%. Only 14% of the agents and brokers reported no change, and 3% said they were seeing more homes in the market.
The NAR survey also found that 57% of its members have sellers delaying their home sales for a couple of months, and another 17% have sellers keeping their homes on the market but are conducting business virtually instead of in person. Ten percent have gone off the market indefinitely, the survey found, and only 8% of the agents said all is normal, with business levels unchanged and showings in person.
Pricing hasn't been affected as much, apparently, and remains a tug of war between buyer and seller. Sixty-three percent of the respondents said their buyers expect to see prices fall, with 23% of that group expecting a decline of 5% to 10%. Seventy-five percent of sellers' agents, on the other hand, said they've seen no willingness to reduce prices and only 2% of sellers willing to drop their asking price by 15% or more.
The glass is one-tenth full
All this is happening against a backdrop of a reeling economy that has seen more than 22 million Americans file jobless claims in a month. The real estate industry has been an active participant in the Paycheck Protection Program (PPP), with the "real estate, rental, and leasing" category approved for 48,940 PPP loans totaling about $8 billion of the $349 billion approved by Congress as part of the CARES Act.
That money has run out, but the NAR did end its report on a note of optimism. "Expect second-quarter home sales activity to slow down with the broad observance of stay-at-home orders, but sales will pick up when the economy reopens as many potential home buyers and sellers indicate they're still in the market or will be in a couple of months," said Chief Economist Lawrence Yun.
Yun also noted that home prices remain stable as deals continue to happen with the growing use of new technology tools, and he added, "Remarkably, 10% of Realtors report the same level or even more business activity now than before the economic lockdown."