Everyone knows that buying or selling a home is an extremely difficult task. Even with perfect market conditions completing a real estate transaction can seem arduous, and during the COVID-19 pandemic we are currently facing, it is nearly impossible.
A new study by OJO Labs shows just how large of an impact COVID-19 has had on the housing market. The study found that 80% of would-be home buyers have decided it is in their best interest to postpone, or even halt their home search for the time being.
The reasoning behind these delays is unsurprising as buyers and sellers are feeling unsettled with the bleak outlook coronavirus has provided. Nearly 2/3 of those polled cited concerns over employment status or the ability to gain employment down the line, and almost 50% credited the inability to see homes in person as a main factor leading to buyer apprehension.
Most buyers have decided to hold off on their home search mainly for two reasons; because of unexpected circumstances like job loss or furlough, and fear of not knowing when things will return to normal. Despite all of the concerns would-be purchasers have at the moment, it does seem there is still a strong desire to buy. 28% of respondents reported looking at online listings and 25% reported taking video tours on sites like Realtor.com or Zillow.
Uncertainty is now housing’s greatest future risk. It’s impossible to know how long lockdowns will continue for, how long America’s economy will remain down, or what the enduring impact on how we live life will be. When state and local lockdowns are lifted and America’s consumer economy restarts, most restaurants, bars, and retail stores will likely experience more pent-up demand than they can handle after months of national isolation: but what about housing?
Housing is an individualized industry, closely connected to many personal factors such as current employment, income, the job market, the stock market, and most importantly, consumer confidence in the real estate market, something that is in a deep valley for the time being. Almost universally, realtors across the nation seem to agree that the industry’s status as non-essential in many states is seriously hurting the spring market, usually a busy time for real estate. It will take some time to see just how severely this virus will impact the national population, and waiting seems to be the biggest detriment to the market currently.
While it may seem like there is no clear light at the end of the tunnel, the most important thing to remember is that despite real estate hurting in the short term, that does not mean this will continue forever. Real estate is a long term investment, not a short term one, and the underlying fundamentals haven’t changed since the COVID-19 pandemic began. People who were planning on buying or selling a home 3 months ago are still planning to buy or sell, their timeline has just been shifted back. Some buyers may not be able to afford a property they originally could, and some sellers may hold off until they feel market conditions are better, but make no mistake, they will still be buying or selling even if it may take some additional time.