U.S. Real Estate Adaptations: Buyers and Sellers | Action through Technology
April 22, 2020
The vast majority of BGRS’s network brokers across the United States are under some form of shelter in place or stay at home mandate. In some cases, the local and regional governments may have made special exemptions for real estate. Regardless, while still abiding by social distancing guidelines, real estate activity endures by employing technology-enabled approaches to service customers. As outlined in our “U.S. Real Estate Activities Impact” article, home sale, marketing, home finding, and purchase activities in the United States have taken advantage of virtual capabilities (e.g., virtual tours, video conferencing) to continue fueling transactions.
The United States’ National Association of REALTORS® (NAR) Research Group published responses to a two-day flash survey (April 12-13, 2020) from nearly 2,300 of its members. NAR’s survey respondents cite using various technology tools to communicate with clients (e.g., social media and video-conference platforms like Webex and Zoom). To that point, when it comes to avoiding face-to-face interaction, E-signatures are the most popular technology approach employed when working with buyers.
The survey also covered buyers’ and sellers’ reactions and expectations to the real estate market, among other topics, as reported by NAR members. Its findings highlight a discrepancy in buyers’ expectations and sellers’ behaviors. Accounting for home buyers, 63% of NAR members said buyers are expecting a decline in home prices. On the other hand, of those NAR members who are currently working with sellers, 75% said that no sellers have reduced the price to attract buyers. When it comes to our clients’ encouraging adaptations to attract buyers amidst this global pandemic, so far, no client has indicated a desire to adjust list prices, but some have extended guaranteed offer periods and required marketing times. The choice to extend mandatory marketing periods is wise in light of 60% of NAR members reporting buyers are delaying their home purchases for a couple of months.
Although the NAR survey cited significant decline in buyer interest (from 90% of NAR members), those still interested are moving forward with offers. In fact, 25% of NAR members who worked with buyers in the week prior to the survey had at least one buyer who put in a contract without physically seeing the home. This relates to 12% of members reporting their buyers are continuing the process, but only relying on virtual communication methods; meanwhile, 17% of members report the same behavior of their sellers.
Buyer behavior: From the perspective of BGRS network brokers who have responded to a BGRS Pulse Survey, while they have seen delays in home-finding trips and interest in “virtual only” options for viewing properties, buyers are still active, with some considering offers on homes they have only seen virtually and not in person during these unprecedented times. Low interest rates also seem to be driving activity, and many of our network brokers are reporting multiple offers on properties in their service areas.
Seller behavior: Related to selling a home virtually, our network brokers also indicated that sellers are reluctant to have potential buyers and agents in their homes. Open houses have been cancelled and some sellers have temporarily suspended showings while keeping their homes on the market for virtual showing opportunities.
With the exception of recent additions of COVID-19 riders and/or contract addendums to U.S. domestic home sale purchase agreements, our clients’ programs have not experienced unexpected changes or issues. Furthermore, no clients have encouraged employees to take homes off the market while shelter in place mandates are in effect. Meanwhile, the NAR Flash Survey findings show 56% of members report seeing sellers remove their homes from the market completely due to the coronavirus versus 25% reporting no homes have been removed from the market for this reason.
BGRS continues to collaborate with its network brokers to stay up to date on trends and impacts realized over time. We also continue to gather early insights into the future of buying and selling homes. For instance, the reliance on technology during this pandemic may mark the beginning of increased digital home sale and home purchase approaches as the standard, as benefits of such methods now include safety in addition to speed and efficiency.
For more feedback from NAR members, find the full report of NAR’s Economic Pulse Flash Survey here. And look out for BGRS’s soon-to-be-published white paper providing a deeper dive into the disruption in the U.S. real estate market.