Homebuyer interest has plummeted amid the coronavirus outbreak, but at least some of those still in the game have been willing to buy without seeing a property in person, according to a weekly survey from the National Association of Realtors.
NAR conducted its latest Economic Pulse Flash Survey on April 12 and 13 and received 2,291 usable member responses to questions asking how the pandemic has impacted their markets. Nearly all, 92 percent, worked primarily in residential real estate. The vast majority of respondents — 88 percent — were in states that had declared a state of emergency and 81 percent worked in a local market with presumed or confirmed cases of COVID-19. The survey’s margin of error was plus or minus 2.05 percent.
Ninety percent of residential Realtor respondents reported that homebuyer interest had declined this week, same as in last week’s survey but a huge jump from the same survey a month ago when only 16 percent said buyer interest had declined. In this week’s survey the biggest share, 44 percent, reported buyer interest had fallen by more than 50 percent, within the margin of error from last week’s survey.
“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 homebuyers and sellers indicate they’re still in the market or will be in a couple of months,” said NAR Chief Economist Lawrence Yun in a statement.
“Home prices remain stable as deals continue to happen with the growing use of new technology tools.”
This week, 10 percent said they had either seen no change in buyer interest or were seeing more interest, same as in last week’s survey. Asked what share of those Realtors were in areas that hadn’t declared a state of emergency or seen COVID-19 cases, NAR spokesperson Troy Green told Inman the trade group had “stopped doing this breakout a few weeks ago as the vast majority of areas had either confirmed or presumed COVID-19 cases.”
The survey found that 19 percent of respondents had clients who put contracts on homes this week. NAR declined to provide the percentage of respondents who had clients who put contracts on homes in last week’s survey.
Of those respondents, a quarter had at least one client who did so without visiting the property in person, down slightly from 27 percent last week when the question was first asked but within the margin of error. By comparison, NAR’s 2019 Profile of Home Buyers and Sellers found 3.5 percent of buyers purchased a home without touring the home in person.
The flash survey did not ask Realtors how many of their clients put contracts on homes or how many put in contracts without physically visiting a property, NAR told Inman.
For those clients who put a contract on a home this week, the median amount of homes they toured — either virtually or in person — before putting in the contract was three, same as last week, according to the survey. The aforementioned 2019 profile found buyers typically looked at nine homes before placing a contract on a home.
In regards to social distancing, 35 percent of Realtors said some aspects of real estate transactions still require in-person interactions while 25 percent said nearly all aspects of the transaction can be done while respecting social distancing guidelines. But more than 4 in 10 found that home searches had to be postponed because of social distancing or that it was near impossible to get a deal done because of government mandates to stay home and banning private showings.
The vast majority of Realtors reported using e-signatures and social media to communicate with buyers and sellers. Use of virtual tours and live videos was more mixed with 55 percent using virtual tours to communicate with buyers and 30 percent not using them at all while 36 percent used live videos with buyers and 54 percent didn’t use them at all.
More than half of respondents, 60 percent, said buyers are delaying their home purchase for a couple of months while 57 percent said sellers are delaying their home sale for a couple of months. More than 8 in 10 respondents (83 percent) said inventory in their market had declined.
While 63 percent of Realtors said buyers are expecting a decline in home prices due to the outbreak, 75 percent said no sellers have reduced their price to attract buyers. Of the remaining quarter, about half had sellers who reduced their price by less than 5 percent.
Only a third of Realtors reported that they had had no closing delays due to the pandemic. Of those who did have delays, 31 percent reported the delay had to do with financing, 27 percent said it had to do with appraisals and 19 percent said it had to do with home inspections.