Should I Sell My House Now? The Essential Guide To Selling in the Age of Coronavirus
Spring is usually prime home-selling season—but this spring is a whole different ballgame.
With the coronavirus crisis intensifying and the economy in a tailspin, some homeowners may be asking themselves: Should I sell my home during the coronavirus pandemic, or wait?
To be sure, this spring's home-selling season will be anything but normal. So far, the latest National Association of Realtors® Economic Pulse Flash Survey conducted mid-March—which already feels like a very long time ago—revealed that 48% of real estate agents have noted a dip in buyer interest compared with a year ago.
“The coronavirus is leading to fewer home buyers searching in the marketplace, as well as some listings being delayed," says Lawrence Yun, chief economist for the NAR.
But this news shouldn't necessarily serve as a dark omen or an intractable obstacle to all home sellers. To help you navigate this strange new home-selling season, we're launching a new advice series, "Home Selling in the Age of Coronavirus."
This first installment tackles whether selling a home today is a good idea. While this will depend a lot on your area and circumstances, we'll help you figure out where you stand, address any concerns, and (if you still want to move ahead) offer ideas on how to sell your home safely with the right precautions in place. If you’re not sure you want to list your home now, here are a few things to consider first.
Is it safe to sell your home amid the coronavirus outbreak?
For starters: If you need to sell your home for personal reasons—because you are relocating for a job, in need of more/less space, or facing new financial circumstances that require a move—you shouldn't let the coronavirus stop you.
In late March, the Cybersecurity and Infrastructure Security Agency under the U.S. Department of Homeland Security declared residential real estate sales an "essential service" that will be allowed to continue. That said, check with your real estate agent and local government for what's allowed in your area, and keep in mind that things could change as this pandemic progresses.
In certain areas, in-person home showings are still happening, although how they are held (and how many people are allowed to attend) has changed. The NAR has released open house guidelines urging real estate agents to limit the number of guests per open house to 10 at a time. They also require potential buyers to wash their hands or use hand sanitizer when they enter the home, and remove their shoes or wear booties over their shoes.
“Sellers incorrectly assume that there will be no showings,” says Adam Kruse, a real estate agent with the Hermann London Group near St. Louis. “We haven’t experienced a significant reduction in showings."
This is particularly true for certain types of properties. Specifically: If you've already moved out and the home you're selling is vacant, you should have an easy job enticing buyers. Let's face it, an empty house seems far safer to visit than one where people still live.
Why your home's listing online matters more than ever
While certain hard-hit areas (such as New York City) have forbidden in-person home showings, this doesn't mean all is lost, thanks to the increased use of virtual home tours using tools such as Facebook Live, Immoviewer, Matterport, Kleard, and others. While virtual tours and showings are a great way to keep home sellers and buyers safe, this new reality has also raised the bar on how homes should be presented and marketed online.
In other words: A few nice photos of your home may not cut it during this period.
“You only get one chance at a first impression, so you don’t want to be using poorly shot and lit iPhone photos and videos," says Ressid Krabacher, a residential broker with the Chicago Home Partner team of At Properties.
So make sure the real estate agent you hire is well versed in digital technologies that will be used to show off your home in the best light. (We'll dive into this topic in more depth in a later installment.)
Coronavirus' impact on the housing market and buyer behavior
While your local real estate market could dictate whether this spring is still a good time to list your home, housing inventory is low nationwide. According to realtor.com®’s March Housing Trends Report, there were 15.7% fewer homes for sale this March compared with a year ago.
Low inventory spells good news for sellers, since there are fewer homes for buyers to choose from. Plus, prices are up, too, with the national median listing prices 3.8% higher than a year earlier, at $320,000.
That said, most of the home sales that closed in March were likely agreed to in February or even earlier, points out realtor.com Chief Economist Danielle Hale. April and beyond may be a different story.
“Our inventory and listing data can provide some early insight into how housing markets may be impacted by COVID-19, but the situation and reactions to it are still rapidly evolving,” Hale says. "I expect a slightly higher number of contracts to fall apart, either because mortgage market volatility or, in some cases, job or income loss prevents buyers from getting the mortgage they expected."
Mortgage interest rates remain low, enticing buyers, but uncertainty in the economy and layoffs have led some potential buyers to hold off on a home purchase.
“That doesn’t mean all transactions are going to stop, but everyone is taking a second look at if buying right now is the best decision,” says Noah Brinker, a real estate investor and owner of Cash Homes NWA in Northwest Arkansas.
While home prices remain fairly steady right now, if economic conditions worsen, more buyers might give up and home prices could drop. So, if your home is ready to list right now, you might want to strike while the iron is still (somewhat) hot.
“With uncertainty at a peak, it seems to me that if the market is going to teeter one way, it would be down at least temporarily,” Kruse says. “So why wait to sell when prices are possibly going to go down?”
Why a home sale might take longer today
If you do land a buyer, be warned that your sale might take longer than usual. On average, it takes 50 days to close on a house, but the pandemic could drag things out even longer.
What's the holdup? Specifically, buyers are asking for more contingencies on their offers in light of COVID-19, such as longer home inspection windows and extended closing times. Along with closings potentially taking longer, some buyers may face delays in mortgage pre-approval because of changing financial circumstances. Home inspections may be delayed, and it could take longer to get repairs made.
Worried your home might sit on the market? The stigma around stale listings is changing fast, too.
"Sellers also assume that their days on market will be high," says Kruse. "But we don’t think that people will be as interested in DOM in the upcoming six months."
In fact, the Real Estatae Board of New York recently asked real estate listing sites to suspend the DOM clock on residential listings, and more areas might follow suit.
Sellers face unique and uncertain times, and, as such, patience is essential. In our next installment, we'll explore the various ways you can sell a house safely. Stay tuned!