With few options to keep her real estate business going as the COVID-19 pandemic spread across New York City and Long Island, Mary Macaluso decided to try giving a virtual property tour as a way to sell a home.
Figuring it would be a long shot, she grabbed her smartphone and headed to her listing to record and narrate a digital tour. The veteran real estate agent posted the video on Facebook, skeptical it would yield any results. Much to her surprise, a few hours later Macaluso had three potential buyers, including one who ultimately made an offer.
“Up until today, I was telling them to wait,” she says of her real estate clients looking to buy a home or sell a home amid the pandemic. “Now I’m on my second showing.”
The real estate industry has come to a screeching halt in many regions as the COVID-19 pandemic rapidly spread across the U.S. With much of America under shelter in place orders and practicing social distancing, real estate agents have been forced to cancel open houses and in-person showings.
Buying and Selling Season Tougher This Year
At the same time, millions of Americans are losing their jobs. Their financial futures now hang in the balance. All of that places the spring buying and selling season, typically the busiest time of year for home sales, in serious jeopardy. According to Zillow, the number of new listings usually grows around 50% from March to early April, but fell 19% this year, as the virus spread. Listings were down 27.1% in the first week of April.
It makes sense. No one knows when social distancing rules will be relaxed, and if or when the economy will recover from this unprecedented shock. “Our understanding of U.S. economic conditions is changing weekly, if not daily, and early unemployment figures are striking, so it’s understandable that some are hesitant to put their home on the market,” says Skylar Olsen, senior principal economist at Zillow. “But activity continues from those who need to buy or sell for a job, or another major life event.”
There’s no doubt purchasing or selling a home amid the pandemic will prove more difficult, but it’s not impossible. Transactions are still happening thanks in large part to an assist from technology.
FIND THE PERFECT REAL ESTATE AGENT: HomeLight analyzes millions of home sales to find buyer’s agents who will show you the perfect home with the right price.
VIRTUAL TOURS REPLACE THE IN-PERSON SHOWING
With open-houses banned in some states and homeowners skittish to let would-be buyers in, real estate agents are turning to technology to give buyers a look inside properties. Real estate agents like Macaluso are recording or streaming virtual tours and holding open houses where buyers jump on a video conference to walk through the home. Many are using tech to turn 360-degree panoramic photos of properties into 3D virtual tours. In the last week of March, Zillow reported a 408% increase in 3D tours created on its platform, compared to a normal week in February. In March, listings that featured a 3D tour received 50% more visits than those without.
“I think there’s such a pent up desire from a lot of buyers who are frustrated they can’t do anything right now,” says Macaluso. “Maybe this is the way it’s going to be.” It’s not just showings that are happening virtually. Other aspects of real estate transactions, whether it’s getting an appraisal or signing documents, are also taking place virtually thanks to digital tools.
SECURING A MORTGAGE REQUIRES PATIENCE, PERSISTENCE
Technology is making real estate deals happen, but in this new real estate norm, it doesn’t guarantee it will be easy for those looking to purchase or sell a home. Outside of the limitations on viewing properties, obtaining a mortgage may prove more difficult. With unemployment at staggering rates, mortgage servicers are busy helping homeowners. At the same time mortgage rates, while at historic lows, are still in flux, making it harder to lock in a rate.
“Interest rates are low, but that being said, the mortgage market is under a bit of stress right now because the government has required mortgage services to work with individuals having trouble paying their mortgage,” says Danielle Hale, chief economist at Realtor.com. “Mortgage rates are moving quite a bit day by day, hour to hour. Getting a mortgage or refinancing will require patience and persistence. It doesn’t mean it can’t be done. It’s just a little more difficult than normal.”
While uncertainty is driving inaction in this current environment, home buyers and sellers can take solace in the fact the real estate market was in a good position before the pandemic hit. A strong economy and the aging of millennials made sure of that. That should help it recover once the virus is contained. “There’s a massive amount of people hitting first time home buying milestones. They are getting married and having kids,” and need a home, says Zillow’s Olsen. “So much of life is moving forward and housing is inextricably connected to life.”
More on HerMoney:
- Your Many Credit Scores and What They Mean to You
- 4 Easy Hacks to Increase Your Credit Score
- HerMoney Podcast: Home Buying & Real Estate Questions
- Buying Your First Home? How To Get A Mortgage
SUBSCRIBE: Own your money, own your life. Subscribe to the free weekly HerMoney newsletter for help staying on top of your finances!