What’s COVID-19 doing to real estate? It’s not all bad
Here’s a stat that might surprise you: March actually turned out to be a great month for real estate sales. At the Allen Edge Team, we had an amazing first quarter compared with 2019.
As COVID-19 has changed the real estate landscape across the world, I also get a great perspective daily on how the virus is affecting other areas in the country. As a MAPS coach coaching agents across the U.S. on how to become a leading real estate agent and by being part of the largest real estate company in the world at Keller Williams, I get to hear stories firsthand from agents across the country with different perspectives.
Each morning at 7 a.m., I do a 20-minute call with thousands of real estate agents across the U.S. talking real estate. We discuss ways we are pivoting our businesses, what we are seeing in the market and different strategies on how to continue to get homes sold.
Agents even in hot spots such as New York to Seattle to Canada who are under shelter-in-place orders are still selling homes. Many agents are taking advantage of social media, virtual options and many safety tactics to get homes sold safely. I’ve even heard stories of people only looking through the windows and watching the virtual tours who are still making offers and getting homes sold. There are a lot of creative, safe options for sellers and buyers.
In our Sioux Falls market, we also are taking advantage of the same tools, holding virtual listing and buyer appointments, virtual showings and open houses and taking necessary precautions.
We are predicting, based on what we are seeing in our office, that for homes going under contract this month we might be slightly down this month compared to last year for under contracts in April, but, of course, we could expect that. On a good note, we are still seeing multiple offers on homes and putting homes under contract. At the end of the day, buyers and sellers still need or want to move for many reasons. Buyers are still taking advantage of low interest rates, people are relocating, and babies are still coming for those wanting to move up.
I read an article by Fannie Mae that predicted annual home sales to be down 20 percent compared to 2019. Time will tell. Historically, there is zero to no direct correlation between the stock market and the real estate market. Although this is a different kind of economic condition than ever before, we typically can rely on history to be a generally good predictor of the future because history repeats itself.
During the dot-com crash in 2000, the stock market went down 9 percent in a single day and then 25 percent by the end of the week, yet it had no immediate impact on the real estate market as a whole. It wasn’t until 2006 really that the real estate market burst. It was the same thing in 2001 when our country was attacked Sept. 11.
As you can see, for the first 15 days in April, we have had 352 new listings, 243 sales have closed, and 117 have changed to pending status. Last year in all of April, there were 575 new listings, 276 closed sales and 373 changed to pending status. We are over half-way to hitting the same amount of new listings this year as last year. The important thing to remember is what an amazing community we live in; even when the crash happened, it didn’t affect Sioux Falls much at all. The higher price range took a bit of a hit but nothing like other areas in our country.
We have a strong economy in Sioux Falls with a diversity of businesses that keep it strong. There is no denying there will be an impact on our market with job losses and unemployment skyrocketing compared to where we were, but as a whole I am confident this too shall pass, and we will all get back on track over time.