Members of the National Association of Realtors are reporting a severe decline in homebuyer activity during the ongoing coronavirus crisis. According to a survey of 2,291 NAR members conducted April 12-13, 90% of respondents cited decreased homebuyer interest at this time, with 44% reporting buyer interest fell off by more than 50% in their market. Only 8% of respondents stated there was no change in activity and 2% of respondents identified increased activity.
Sixty percent of NAR respondents said their buyers were opting to delay home purchases for the next several months, with 12% stating their buyers have put the process on indefinite hold. But 12% reported they are pushing ahead by using virtual communication and 8% stated they were conducting business as usual. On the flip side, 57% of respondents said their sellers were delaying listings for the next several months while 10% of sellers put their proposed sale on indefinite hold.
For the buyers that are still in today’s market, 63% of NAR members found buyers were expecting home prices to decline at this time, with 23% waiting for a decrease between 5% and 10%. However, three-quarters of respondents said their sellers did not lower their prices, with only 13% reporting price cuts of less than 5%.
As for the transactions that occurred, 33% of respondents reported no closing delays. As for the glitches in the final stretch, problems were attributed to financing (31%), appraisals (27%) home inspections (19%), final walk-throughs (16%) and in-person signature requirements (13%).
One-quarter of the real estate professionals said they were able to complete nearly every aspect of the home-buying transactions while respecting social distancing protocols, with 35% using face masks and gloves to conduct person-to-person interactions. However, 20% of respondents said their local stay-at-home mandates prevented the completion of their transactions and 13% have postponed transactions due to the inability to conduct person-to-person communications.
NAR members also cited their increased reliance on technology to engage with buyers and sellers during this period, with e-signature solutions being used with 81% of their buyers and 77% of their sellers. But videoconferencing has not been fully embraced by real estate agents, with 57% of respondents stating they don’t use Webex or Zoom for their business communications.
“Expect second-quarter home sales activity to slow down with the broad observance of stay-at-home orders, but sales will pick up when the economy reopens as many potential home buyers and sellers indicate they’re still in the market or will be in a couple of months,” said NAR Chief Economist Lawrence Yun. “Home prices remain stable as deals continue to happen with the growing use of new technology tools. Remarkably, 10% of Realtors report the same level or even more business activity now than before the economic lockdown.”