When Alex Ingoglia and Brooke Brady, two recently engaged law school graduates from the Midwest, first planned a trip to Atlanta in March to search for the perfect starter home, they didn’t figure they would need an escape plan. But in the age of coronavirus, even something as seemingly pedestrian as touring homes requires a little more planning.
As Ingoglia, 26, sat at Chicago’s O’Hare International Airport on Sunday, March 15, getting ready for a few days of househunting, he couldn’t stop thinking about the new CDC recommendations, the COVID-19 news, and the (later debunked) rumor floating around via text message that the government might institute a nationwide lockdown. To play things safe, he booked return flights for him and Brady, 25, for Monday, Tuesday, and Wednesday nights, to make sure they wouldn’t get stranded.
As they started looking at homes Monday, it became clear they weren’t the only people with the coronavirus on their minds. Every new home required a haphazardly choreographed dance of disinfecting: new gloves, hand sanitizers after touching any surfaces, and lots of handwashing (Ingoglia estimates they washed 100-plus times). Without the notorious Atlanta traffic, they were able to zoom across the region and see 15 homes a day.
“It felt like we were racing the virus,” says Ingoglia. Further travel bans and shelter-in-place rules convinced him that had they not looked at homes those two days, they wouldn’t have been able to buy.
But the rushed shopping paid off. After two days, they successfully put a $615,000 offer on a grayish-blue home in Tuxedo Park boasting a spiral staircase and original fireplace. They left town and celebrated at their favorite restaurant; due to social-distancing rules, they couldn’t get their normal booth seats, since they’d be too close to other customers.
They’ll have a virtual closing April 24, if everything works out as expected in this whirlwind process. The speed likely saved them money.
“The seller said they would have listed a lot higher had it not been for coronavirus,” says Brady. “They wanted to get offers in quickly, since they were scared of a lockdown. We didn’t have to sell and could close in 30 days, so we had an advantage.”
Ingoglia and Brady are excited to set down roots and get to know their neighbors in the city where they met in the summer of 2018, when they were both legal interns. They realize that it may take longer than expected.
“We’ll be the new neighbors on the block nobody knows for a few weeks,” says Ingoglia. “At least we’ll be in a new set of rooms. It’ll be nice to have a change of scenery.”
Ingoglia and Brady’s experience offers a picture of what it’s like to buy a home amid the novel coronavirus pandemic: rushed, constantly adapting to new rules and technology, and charged with an undercurrent of fear and economic uncertainty. Christa Huffstickler, CEO and owner at Engel & Volkers Atlanta, the firm that worked with the new couple, says the process has become truncated.
“It used to be breezy and relaxed, and buyers could take the time to look at eight to 10 homes,” she says. “Now, you have to narrow it down, streamline things, and know exactly what you’re looking for after doing more work online.”
Metros with the Largest March Inventory Decline
|Active Listing Count YoY
|Median Days on Market
|Active Listing Count YoY
|Median Days on Market
|Milwaukee-Waukesha-West Allis, Wis.
|San Diego-Carlsbad, Calif.
|San Jose-Sunnyvale-Santa Clara, Calif.
|Riverside-San Bernardino-Ontario, Calif.
|Kansas City, Mo.-Kan.
|Washington-Arlington-Alexandria, DC-Va.-Md.-W. Va.
|Los Angeles-Long Beach-Anaheim, Calif.
|Virginia Beach-Norfolk-Newport News, Va.-N.C.
|Austin-Round Rock, Texas
|Tampa-St. Petersburg-Clearwater, Fla.
|Las Vegas-Henderson-Paradise, Nev.
The days of telling clients to visit a home with a lockbox and tour it themselves are over, she says. Every visit requires sanitization protocols, and many properties have been taken off the market, since potential buyers still living in their homes don’t want strangers visiting.
According to Alison Bernstein, president and founder of the Suburban Jungle, a national real estate group focused on facilitating moves out of big cities into the suburbs, we may be sheltering at home, and nonessential businesses may be closed, but for various reasons, people still have to move. So the housing market beats on, and as Bernstein says, “every day is a new experience.”
“People have different degrees of desperation right now,” she says. “Some people are scared of getting in their apartment elevator and want out. Right now, this job is 99.9 percent therapy, and .1 percent real estate.”
It’s understandable that the market would feel uncertain in the midst of policy shifts, economic shock, and a spreading pandemic. But in many ways, COVID-19 is accelerating existing trends in real estate.
According to George Raitu, a senior economist with Realtor.com, the pandemic is currently compounding the shortage of homes on the market. There has been a steady eight months of year-over-year decline in inventory, driven by a huge demographic wave of younger Americans buying homes, coupled with an undersupply of new homes coming on the market. Economic fears over the fallout from the novel coronavirus have accelerated that inventory decline; Raitu says that overall inventory across the nation dropped 34 percent in the last week of March alone, and he expects a further 30 percent drop over the next four to six weeks.
“Sellers who would have waited for the traditional spring season in April or May, when many people put their homes on the market, are now not listing or pulling these homes off the market,” he says.
Understandably, real estate agents want to make sales as quickly as possible, before listings and business dry up any further, and doing anything and everything they can to do so while adapting to social distancing and health protocols impacting their work. Mary Ellen DeLoache, 75, just bought and sold homes in Decatur, Georgia, last month. She sold the home she had lived in with her late husband for $499,000, and bought a new home for $307,000, located down the street from her daughter’s house.
When DeLoache embarked on the selling and buying process in January, things initially proceeded as normal. By the time she closed the sale of her home, March 12, hand sanitizer was on the table for all meetings, and everyone had their own pens. When she closed on the purchase of her new home March 31, she did it all remotely, wiring cash and signing the documents digitally. The agents also offered her the option of driving up in her car and leaning out the window to sign documents in person.
“I thought that was very accommodating, considering my age and risk factor,” she says. “I was very pleased that i was able to do it remotely.”
The rapid adaptation of technology has been crucial to keeping real estate transactions on track in the midst of social distancing. Philip Tucker, a New York-based lawyer who works with developers on residential developments and condos, says that remote closings are fast becoming the norm, as title companies, banks, and other parts of the real estate ecosystem get dragged into a future they’d thus far resisted.
“People just needed to get their heads around the changes this situation would bring to their day-to-day lives, before they could process how business is going to work,” he says. “Residential closings had been working like a machine. But now, even though the quantity of business has gone down, we’re spending more time on individual transactions as people adjust to new ways of working.”
There are significant signs, especially in rough unemployment figures and the disappearance of inventory from the housing market, that home sales are steeply declining. (Accurate figures won’t be released for weeks.) But while the majority of Americans stay put, Bernstein, who specializes in suburban relocations, says she’s seen spikes in business from families looking to get out of the city. A spike will often hit a market right after a stay-at-home order is issued.
“Some have their lease up, some want to flee the city, some have decamped for vacation rentals and are feeling itchy about eventually returning to the city,” she says. “The real trick is getting inventory.”
She’s also found that some young professional families are putting out feelers for a potential move. In many cases, with two parents working remotely at home together, and kids at home in school on their computers, families are feeling particularly confined and looking for space.
“Everyone is on their own stuck in their apartment, and they’re not feeling that sense of community that makes city living so great,” she says.
Like any industry reacting to the quickly evolving coronavirus crisis, real estate is in flux, and the long-term shifts are yet to truly materialize. Bernstein believes there’s going to be a lot of movement within markets, as an increase in teleworking and remote work makes it easier to move to nearby suburbs.
Raitu, the economist, says that while it’ll take months to really sort things out, he believes that by June or July, there will start being more permanent shifts in pricing for homes across the country. It’ll be difficult to find comparables in the marketplace, since most agents across the country tell him that things are pretty much at a standstill. It all depends on the fitness of the larger economy.
“If a majority of Americans have jobs, and restaurants, airlines, the concert industry, and other hard-hit industries can quickly ramp up, the housing market will follow,” he says. “There’s just tremendous tailwinds, demographically, and interest rates will be low. But come July, and if consumption is still frozen, we’ll see a much bigger hit to the housing market. Coastal high-cost markets, especially those with lots of cases, will take much larger price hits.”