With the recent economic downturn, homebuyers and sellers everywhere could be having painful flashbacks to 2008, when the mortgage crisis led the housing market to collapse, and what we knew as “The Great Recession” followed.
With a global pandemic and an even sharper economic downturn this year, it’s easy to compare the two instances and worry about selling your current home, or buying a new one. But there is hope. Although Khalil Alexander El-Ghoul, principal broker and owner of Glass House Real Estate, admits no one can predict the market’s future for sure, there’s still reasons to be cautiously optimistic about finding yourself in the housing market right now.
Below, find El-Ghoul’s advice for homesellers and homebuyers, how realtors are tackling in-person home tours (with the help of added technology) and the questions you should be asking your real estate professionals at this time.
Have you still been successfully selling homes during the pandemic? Are many buyers still interested, or have you seen a pause?
Yes. This April we have sold 30% more homes compared to April of last year. Most of these clients were in the pipeline prior to the pandemic, but went under contract after the outbreak started. Supply and demand are pretty in line right now in desirable neighborhoods. If prices go down, it will happen gradually, so many sellers would rather get ahead of any potential declines.
Let’s start with homesellers first. For those who might have put their house up for sale right before the outbreak started, or already had their house on the market, what circumstances are they finding themselves in, and what do they need to know?
Fortunately, before the outbreak our market was poised to have a record-breaking spring selling season. Sellers were enjoying one of the best seller’s markets that I have ever seen, whereas multiple offers and limited contingencies were not uncommon. That does not disappear overnight.
For folks who were on the market when this started, we had to navigate the ethical and practical complexities of trying to sell a home during a pandemic. If you were living in the home while selling, we needed to quickly figure out what the various stay-at-home orders, closures of businesses and health impacts meant in terms of conducting an otherwise complex transaction with multiple parties involved. Would we be allowing large numbers of strangers in your home possibly risking your health or public health? Could we hire movers to move your belongings? Could I fly to my next destination? We became intensely focused on our existing clients and worked to help them feel comfortable moving forward.
Transactions are still closing with relatively little interference and delays. You can successfully sell your home during this time.
Even though people aren’t technically touring homes right now, how can homesellers continue to reach potential buyers right now?
This is a common misconception. Whether we like it or not, many sellers still need to sell and with proper safety precautions in place, we have been able to safely continue to show and sell homes. We quickly instituted 3D virtual tours, strictly qualified showings, required PPE (personal protective equipment) and hand sanitizing, posted safety and social distancing rules at the home and drastically reduced the amount of people that came through homes.
With regard to reaching potential buyers, it is business as usual with the addition of 3D virtual tours and offering prospects virtual showings before scheduling in-person appointments. In the past, I was reluctant to include 3D virtual tours with all listings as it can discourage showings and/or not be flattering for every property. However, now it is standard on all listings.
Despite lots of hype, it has been my experience that the vast majority of buyers (especially the local buyers) need to see the home in person before deciding to move forward.
What would you want readers who are selling their homes now to know?
Sellers should be cautiously optimistic. Your home is worth what just one person is willing to pay at any given time. It is safe to say that buyer demand has declined significantly, but so has inventory, so there is still opportunity to get top dollar for your home. It is important to avoid aspirational pricing—be willing to work with potential buyers, and use an abundance of caution when showing your home.
When I meet with sellers ahead of listing their home, we discuss a pricing range based on optimal market condition versus not-so-optimal conditions. Nearly all of my sellers are still getting nearly top dollar for their homes.
As for homebuyers, how can those interested in buying, or already in the midst of it, feel confident in buying their home and proceeding with the moving process?
If you are well-qualified and income secure, logistically buying a home right now is not much different than it was a month ago.
Buyers right now are taking on the most amount of risk. I would not suggest jumping in to the market if you do not have to buy a home. There is no evidence of significant discounts for well-priced homes that show well. Interest rates are low but economists almost universally are predicting low rates are here to stay and, frankly, they have been low for a long time.
The worst-case scenarios right now are pretty catastrophic and the best-case scenarios are likely to be a return to pre-pandemic levels. I would hedge my bet and wait.
There are always exceptions. Luxury or higher-priced homes are finding fewer buyers and there are opportunities to get discounts from sellers who want to cut their losses. If you were often finding yourselves being outbid in previous offer attempts, you might find that there is less competition on those same houses.
Lastly, if you have to sell to buy, transferring your equity to your move-up home or forever home could make sense for many people.
What advice would you offer to homebuyers during COVID-19?
Price is just one component of buying a home or making an offer. Offer more value to sellers by conveying strength in your offer with strong financials, quick closings, taking the home as-is and asking for discounts in price in return.
There are fewer homes to look at but more will come. Don’t be discouraged by the lack of inventory. Lastly, have patience!
What questions should homebuyers/homesellers be asking right now, to themselves and to the professionals helping them?
Why am I selling or buying and what is happening right now? Real estate agents are not economists. A great agent can survey the current climate and create an action plan and strategy for success in today’s market. An agent that tells you it’s going to get better or worse in the future is simply making it up because no one has that answer.
Is there anything else you think readers should know about being a realtor at this time or buying/selling a home during COVID-19?
Realtors are often dealing with crisis and difficult times in people’s lives. Whether it be a divorce, death, hardship or other situation, and an experienced agent solves problems. Although this is something no one in our lifetime has ever seen, together we can get through it and be successful.
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