Similar to many other industries during the coronavirus pandemic, real estate is seeing a slowdown in business.
New listings and active listings are down year over year 4.8% and 2.3%, respectively, according to the Houston Association of Realtors’ March First Real Estate Snapshot of Houston.
But it is not all bad news: The average list price has increased 3.6% to $320,396, per the FRESH report shared ahead of HAR’s comprehensive March 2020 home sales report, which will be published April 8.
Now is an important time for Realtors to build rapport with potential buyers and sellers, said Tim Sojka, a residential and commercial Realtor and the owner of See Tim Sell Property Group of Keller William Premier Realty. The company offers real estate services throughout Houston but focuses on Katy, Fulshear, Richmond, Cypress and Sugar Land.
“I think the most important question that any industry can ask right now is, ‘What can we do to help you?'” Sojka said.
Sojka said real estate deals are still being struck during the COVID-19 outbreak. Prices are more of an indicator of activity rather than location or geography, he added.
Community Impact Newspaper chatted with Sojka to learn more about how real estate is adapting to the pandemic and what it means for the industry's future. This Q&A has been edited for length and clarity.
How is the real estate business faring during the coronavirus?
I think the real estate business is probably running with most other business. I talked to a lot of other industries, and they say they’re going down about 30%. And I would say that’s going to be for us, too. We’re not going to fall to the floor or anything. We’re still doing business. It’s really a matter of if you’re working: There are still people who need to sell even in this [COVID-19 pandemic].
What types of homes are selling right now?
Anything less than $300,000 we’ve seen a lot of offers on. And we see multiple offers on anything sub $200,000.
The higher-end stuff, I’ve seen offers on, but people are [giving low offers]. We’ll have a $1 million listing, and someone offers $850,000. But we are seeing some offers on the higher end; it's not that $1 million homes aren't selling, it's that smaller homes [are selling quicker].
Investors are buying because they see an opportunity, and people are buying down, so I think it’s going to crowd that market out.
How are Realtors showing homes and selling them amid stay-home guidelines?
I think the one thing that you have to consider is your safety options. We’ve given our agents options: Do you want to go out, or do you not want to go out? I can’t for family reasons, for medical reasons. But some of our agents are like, “Hey, I still want to go out and show.”
Everyone is making decisions for themselves. I can’t demand that they show because I’d be putting agents at risk. I also can’t demand that they don’t show because financially they may need the money.
Have you experienced an uptick in virtual showings?
Yes, we’re getting offers on properties people haven’t seen. That’s interesting. We expected it. Interested buyers are making offers based on the virtual tours. I won’t say that it’s happening a lot, but it has happened a few times already.
What about commercial real estate? How is that going for you?
One commercial deal died, but most of the people are still trying to move forward, so I haven’t seen a real fall off in commercial.
The thing we are seeing is a lot more internet leads. Think about it: People are home, they have time. So we’re seeing a lot more internet leads. Not a few more—a lot more.
How are buyers and sellers able to close deals under social distancing mandates?
It depends. We’ve seen from outdoor closings to virtual closings to ‘If you don’t have a pen, then you don’t come in.’ The agents don’t get to come in. It’s just the sellers and buyers. Each title company has a little different policy.
What are the ramifications COVID-19 may have on the real estate market?
I think a lot of people are going to buy down [buy a smaller home] over the next year or two. At the end of this, unfortunately, there’ll be some people who have to sell because they’re being relocated or because they’re being downsized or because they bought a big house. That’s tough, that’s sad, and you hate to see that—but that’s how [Realtors] make a living.
[On the commercial side,] there’s a real challenge for restaurants. I’ve talked to lenders, and they’re really putting restaurants through the rigmarole. Banks might be more tentative to lend money to restaurants.
But do bankers think this is a one-off? Is COVID-19 a one-off or is it something that going to happen every three years? We’ve had a moderately major outbreak three of the last five years. This is the first one where they shut down the economy. If this is something that’s going to happen every two or three years, that’s a really scary thought, and that’s a completely different conversation.
Q&A: Houston-area Realtor describes changes in business during coronavirus outbreak
Prices are more of an indicator of real estate activity during the coronavirus pandemic than location or geography, a local Realtor said.