Matt Laricy’s high-end open houses were struck down by the coronavirus.
Laricy told Inman Monday that his Chicago-based team, which is a part of Americorp, held about a dozen open houses over the weekend. Buyers showed up at the entry level properties, and Laricy described the scene as “business as usual.” Traffic at the mid range properties was more mixed, but it was the luxury listings — which ought to be doing well right now — that really suffered.
“Our luxury listings got almost nobody,” he said.
The drop off in traffic came as, in Laricy’s words, Chicago effectively “went on lockdown” over the coronavirus — which the World Health Organization declared a pandemic last week. Last week also saw financial markets in free fall, as well as the number of coronavirus cases steadily increasing in the U.S. And as the situation worsened, a number of agents speculated at the time that the coming weekend could serve as a bellwether for how open houses, and the market, might fare going forward.
With last weekend now in the rearview mirror, a few things are clear.
First, agents are still holding open houses, and at least some people are still attending them. But, second, they have now taken a hit in many places, and are likely to see waning turnout or cancellations in coming weeks as well. And that, in turn, may also foreshadow trouble for the normally strong spring buying season.
Across the country, a number of agents told Inman that they saw curtailed activity this weekend. Among them, Tracy Do, a Compass Agent in Los Angeles, said that she and her team originally had eight open houses scheduled. However, a handful of clients ultimately backed out, and only four of the open houses ended up happening.
Yet at the open houses that did take place, “traffic was consistent with the weeks prior to the outbreak,” Do explained.
The experiences of Do and Laricy capture the strange and transitional moment that real estate is currently in right now; some open houses are canceled or empty, while others are still booming.
“The real estate market is definitely impacted, though things are still in progress and we won’t know the results [of] Covid-19 until later,” Do added.
A survey of Compass agents further supports the idea that open houses are continuing, but also likely to become rarer. The company surveyed more than 400 agents and found that 43.8 percent in Northern California and 37.2 percent in Southern California held open houses last weekend. However, 10.8 percent of the survey respondents in Northern California and 12.4 percent in Southern California actually canceled their open houses.
Mark McLaughlin, president of Compass California, told Inman that many agents may simply have not had enough time to cancel their open houses as the coronavirus news unfolded last week. And he expects cancelations to become widespread in the coming days.
“I would think that within the next 24 to 48 hours, we will probably go to a by appointment only open house schedule,” McLaughlin said. “We wouldn’t be good citizens if we were doing it another way.”
The open house scene, however, varied considerably over the weekend depending on where agents were working. Los Angeles-based Compass agent Jodi Bell Ticknor, for example, said that she helped an open house over the weekend in Santa Monica, California. The number of people who came through was on par with what had happened at the property during previous weeks, and the atmosphere was “pretty chill.”
“I’d say people were pretty relaxed,” she said.
The coronavirus was, however, still an issue. Ticknor said that she put out wipes and hand sanitizer. One visitor declined to touch the computer screen to sign in, instead opting to verbally share her information with Ticknor so she wouldn’t have to come into contact with anything in the home.
Josh Goldstein, also a Compass agent in the L.A. area, similarly told Inman that “turnout was pretty good and in line with what we normally expect.”
On the other hand, Staci Yesner of @properties told Inman that the coronavirus “has impacted all of the traffic in the Chicago market as far as open houses.” Yesner said that turnout at last weekend’s open houses in the Chicago area varied by area — the suburbs were stronger than other areas, for instance — but that she believes more and more will be canceled going forward.
“There is definite talk of people shutting down open houses in the city, because of the density of population,” she added.
In some markets, cancelations are exactly what some real estate professionals want. Shelley Rossi, the vice president of communication at Windermere Real Estate, told Inman that in the Seattle area “open house traffic continues to be very strong.”
However, Windermere would like Washington Gov. Jay Inslee “to add real estate open houses to his list of public events that are banned in Washington State through the end of the month.”
“Our CEO Geoff Wood sent an email to the governor’s office this morning with that request,” Rossi added.
In the meantime, the company is telling agents to stop holding open houses and is in talks with other brokerages to see “what further restrictions we might be able to put into place.”
“Windermere has strongly recommended to our brokers in the greater Seattle area that they cease holding open houses through the end of the month,” Rossi added.
New York-based Compass executive Leonard Steinberg went even further over the weekend, calling for a two week ban on home showings altogether.
The takeaway here is that while this last weekend was a bit of a mixed bag in terms of open house attendance, most real estate professionals appear to envision the coronavirus situation worsening in the immediate term. As a result, open houses are likely to become more infrequent.
And even some agents who continue to plan open houses don’t actually expect people to attend.
“We’re going to do probably 15 open houses this weekend and I think they’re going to be dead,” Laricy said, explaining that holding an open house sends an email to consumers who have tagged a property on Redfin or Zillow. The point, in other words, is more to “slide into somebody’s DMs” than to get attendees on the ground.
Where all of this leaves the industry overall isn’t entirely clear yet, but at this point there appears to be both good and bad news.
The good news is that consumer demand still exists. McLaughlin recalled working through past recessions, and expressed amazement Monday that history isn’t currently repeating; in California at least, “buyer activity remains ferocious,” McLaughlin observed. But he also said that widespread layoffs could change that, but he still believes that the financial environment is healthier today than it was in the beginning of the Great Recession.
“I don’t think we’re getting out unscathed,” he told Inman, “and I don’t think it’s going to be a huge disaster.”
The wildcard, however, is how long the coronavirus continues to plague the U.S. Laricy pointed out that many of the hardest-hit people — for example those in the service industry — don’t have significant savings. That means a shorter duration crisis might not be so dire, but a protracted situation could be really bad for real estate.
“If this turns into six weeks,” Laricy, said, “I think we’re fucked.”