Historically, spring is the high season for U.S. home shopping. In recent years, online real estate search activity begins to ramp up in March and April, leading to a peak in sales in June and July. However, the strict stay-at-home measures implemented in March and April put a strain on the real estate industry. So far, studies have shown a decrease in home listings by more than 30%, according to realtor.com®, an uncharacteristically high drop for this time of year. This anomaly is the result of a market affected by COVID-19. Asking prices have also recently reached the slowest year-over-year growth rate since 2013.

But the drop in mortgage rates to an all-time low of 3.13% in June has been a win for buyers. As a result, the real estate industry is not at a complete standstill. Yet because the pandemic is still very much with us, real estate professionals who are able to do showings have to take precautions. Here are four suggestions for steps brokers and agents can take to keep themselves and their buyers and sellers safe in the new normal.

1. Postpone in-person showings in highly affected areas.

The Centers for Disease Control recommends limiting unnecessary contact as much as possible. In many areas, this means pressing pause on open houses and home showings, especially in markets with high local rates of infection. In places where brokers and agents offer face-to-face, in-person showings, they should wear masks and remain 6 feet away from their clients while in a location.

2. Use technology as an alternative.

Video is a great option for showing properties to clients. Use 3D home tours, aerial footage, and virtual neighborhood tours to give clients a comprehensive understanding of the property from the comfort and safety of their own homes. Real estate pros who are not equipped to take video footage of a property themselves should consider hiring a company to do so. Agents should also consider scheduling virtual showing appointments using Zoom or FaceTime to present the listing to clients.

Alternatively, agents can host a livestream showing event on social media. Since this is an activity that does not require other people, agents will be safely alone in the listing while generating buzz around the property.

Implementing a smart lock system is another option to allow clients to see a property in person, but without an agent present. With a smart lock system, sellers or agents can control entry to the property remotely using a smartphone or provide visitors with a one-time access code. This technology can also track entries and exits, limit access to certain time periods, and add value to the house. This option has been growing in popularity with agents since before the pandemic because it helps increase the number of possible house viewings. In this time, it has become an even more worthwhile investment.

3. Take extra safety precautions.

Despite all the virtual options available, many buyers still want to see a property before they purchase it. For agents who are permitted and choose to continue offering in-person walk-throughs, it is important to take safety precautions. Instead of holding an open house and allowing people to show up at any time, offer time slots for walk-throughs, so people can come and check out the property without additional exposure to strangers. Advise anyone who arrives early that they must wait in their car or outside of the property, maintaining 6 feet of distance from other viewers.

Keep doors, drawers, and cabinets open to prevent guests from touching things as they move around the property, and asking them to wear booties to limit external contaminants. Wiping down all surfaces with disinfectant will help prevent cross-contamination among visitors.

4. Stay current on news and changes.

With the rate at which the situation is changing, it is difficult to predict the long-term effect that COVID-19 will have on the real estate industry. If mortgage lending isn’t overly affected, real estate will continue to be a good option for people looking for less volatile investments in a financially tumultuous time.

For the time being, it is essential that every real estate company makes a conscious effort to keep their agents, staff, and clients safe in the hopes of flattening the curve and helping business return to normal as soon as possible.

The post 4 Tips for Navigating Property Showings During the Pandemic first appeared on Housing Market Marketing by Housing Market Group.

White-collar professionals with job security, the ability to work from home and access to cash and credit have been able to continue their home searches and take advantage of low mortgage interest rates. Struggling the most are those with low-income jobs in industries like service and hospitality—groups with a higher percentage of Blacks and other minorities—that had largely already been priced out of the housing market even before the economy braked sharply, according to a new report by Redfin real estate brokerage.

“Record unemployment for low-income jobs and a skyrocketing stock market only deepens the divide,” the report finds. “Because of this inequality, the pain of the coronavirus recession is likely to be over relatively quickly for the economically privileged, even in areas where unemployment has soared.”

Redfin lead economist Taylor Marr pointed out, “With record-low interest rates and relative job security in spite of the recession, higher-income home buyers are already coming back into the housing market. Because of this quick bounce back in home-buying demand, this recession is playing out very differently than the Great Recession, and we’re not seeing much impact on home prices so far.”

The increase in demand from economically advantaged buyers over the past two months highlights the inequality in the housing market over the past decade. Redfin reports that the market has mostly been driven by white households with higher incomes—households less likely to have been severely affected economically by the coronavirus shutdowns.

A Federal Reserve employment survey taken in May shows that the unemployment rate for those at the top of the income spectrum ($100,000 and above) was 10%, less than half of the 21% rate among those at the bottom end who are making less than $60,000.

In addition to the disparity in unemployment across income brackets, there is a large racial gap, which can be seen in the May unemployment data from the Bureau of Labor Statistics.

“The outsized impact of this recession on Black families is just the latest in a long string of inequities including segregation, redlining and home lending discrimination that continue to impede their ability to build wealth,” the report states. “Even before the current surge in joblessness, the unemployment rate for Black families was three points higher than the rate for white families. Now that difference has doubled to six points.”

Home-buyer demand has been recovering in nearly every city, even those with the highest levels of unemployment, driven by record-low mortgage rates and pent-up demand. The strongest comeback has been in Detroit, where the April unemployment rate was nearly 25%.

“Home-buying demand came back in Detroit as soon as shelter-in-place restrictions were eased for real estate agents on May 7,” said Michael Garliauskas, Redfin Detroit market manager.

Local Redfin agent Scott Goleniak agreed. “When this all started, I truly thought it would shut down the real estate market, but that was far from what happened in Detroit.”

Detroit Redfin agent Tony Orlando added that “people who are still employed and confident in their continued employment still really want to buy. They know rates are at historic lows and they want to take advantage of it; they are not afraid to buy during these odd times. Buyer demand is insane here, and nearly every home is a multiple-offer situation. Of about 12 offers I have written over the past 10 to 12 days at price points between $200,000 and $700,000, all but two were multiple offer situations. It is astonishing.”

Cities such as Seattle and San Francisco that have a large percentage of high-tech jobs and relatively lower unemployment rates are also seeing a strong recovery. Redfin’s home-buyer demand has bounced back to over 35% above its pre-coronavirus levels in both of these tech towns.

In New York, home-buying demand has not recovered as strongly as it has in other places, likely because it was one of the worst-hit places by COVID-19, which is leading to an increase in migration away from the city, the report states. Redfin agents in areas that are popular destinations for people looking to escape New York are already seeing signs of this shift.

“Old New York is looking in Connecticut,” said Connecticut Redfin agent Mike Dusiewicz. “It feels like no one wants to look in New York City anymore. They are moving out to Long Island, Connecticut, Hudson Valley and New Jersey. I’m working with a lot of buyers from New York who were planning to move to the suburbs in two to three years, but the pandemic has sped up the process for them.”

The industries experiencing the worst unemployment were mostly those with lower wages such as service, hospitality and retail. People working at bars reported a 60.6% unemployment rate in April. Hotels saw 48.7% unemployment, and the unemployment rate at restaurants was 34.8%. Because of this, the local economies in metro areas like Las Vegas that have large concentrations of people who have been hit the hardest are likely to see more of a lasting impact from this recession, the report states.

In contrast, some of the best-paying industries have barely seen an increase in their unemployment rate.

“The banking industry had just a 2.9% unemployment rate in April, while securities (3.4%) and computer systems design (software developers), (4.2%) were also among the least-impacted industries,” the report states, adding: “Meanwhile, tech stocks have been hitting new highs throughout the pandemic, further lining the pockets of their well-paid workforce, whose compensation often includes large stock grants. As a result, areas like San Francisco and Seattle are likely to see a return to overall economic expansion much sooner than cities like Las Vegas.”

Even within a single market, the disparity between the haves and the have-nots is becoming very clear. In the midst of the pandemic, Phoenix-based Redfin agent Kelly Khalil has been working with a client from Chicago who is buying a second home.

“They aren’t planning on retiring for two more years, but they want to buy their retirement home early to take advantage of what they feel is a low market,” explained Khalil. “On the other hand, there are parts of Phoenix that have been hit really hard due to the total shutdown of tourism. We’re seeing a lot of homes that were formerly rented on Airbnb hitting the market. I have one client who had three in the same neighborhood but has now begun to sell them because they can’t afford to pay four mortgages without the rental income.”

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The 2020-21 Top Ten Issues Affecting Real Estate, discussed recently in a webinar with real estate editors, shows the deep effect of the pandamic on factors affecting the real estate market.

“The change wrought by the COVID-19 crisis and its aftermath will teach us about priorities, resilience, and demand in ways that we did not dare test before,” Michel Couillard, 2020 global chair of the CRE, said in prepared remarks.

He  noted that the top 10 issues are “highly interrelated” and the list attempts to explain the effect of the coronavirus on an already dynamic real estate environment.

Pointing out that real estate is a lagging industry and the effects of the pandemic may not become clear for several years, the CRE report list suggests that COVID-19 may lead to increased demand for real estate — due to the need for social distancing in business, government and entertainment venues — or lower demand as virtual work expands.

“Demand will be defined by the extent to which this crisis leads us to abandon old habits and adopt new ones,” the CRE writes.

Economic challenges are the second largest factor facing the real estate industry, according to the report, with significant segments of the economy “debilitated” in the wake of the pandemic.  Those include leisure and hospitality, retail, air travel and construction, which are likely to rebound slowly into 2022. Also, the CRE list notes, the health care industry is facing a squeeze because of the coronavirus crisis, and the stay-home orders are affecting state and local tax revenue.

“Such risks suggest an unusual “W-shaped” recession, a second contraction following the initial improvement of a partial economic reopening,” the CRW wrote.

Next on the list are other economic factors are capital market risk, and public and private debt.

According to the CRE, volatility has spiked since the middle of March, which makes it more difficult to price debt. And as for the public and and private debt, real estate is local and the value of commercial real estate can be affected by local debt that’s paid by local taxes.

Affordable housing, the next challenge on the list, was an issue even before the COVID-19 pandemic, with the shortage strongly affected by a “Not in My Backward” mentality. The CRE said solutions include expediting the approval process for affordable housing, expanding taxpayer-funded front-end subsidy programs, and strategic use of zoning.

Sixth on the Top Ten list is the flow of people, which has been slowed by the pandemic and by restrictions to immigration, which leads to reduced demand for housing. Space utilization, which is seventh on the CRE list, is also expected to have a lasting impact on the design and use of real estate due to the pandemic as the safety of building occupants is a vital focus.

Rounding out the list are technology and workflow; infrastructure; and environmental, social and governance (ESG) factors.

The post COVID-19 Heads Top 10 List of Factors Affecting Real Estate first appeared on Housing Market Marketing by Housing Market Group.

“There is uncertainty as to how the pandemic will impact commercial real estate over the medium-to long-term, but what remains clear is that the asset class represents a large and growing part of global institutions’ investment strategies,” said Susan Swanezy, partner at Hodes Weill. “While caution over the short-term is likely to result in decreased investment activity, we expect to see an uptick as lockdowns and travel restrictions begin to lift and impacts to asset valuations and market fundamentals become more clear. It may take time for distress to appear, but well-capitalized funds will be positioned to take advantage.”

While managers have approximately $328 billion in dry powder allocated to real estate funds, according to Preqin, Hodes Weill found that many investors are focused on increasing their vintage exposure over the next several years. The unique challenges associated with lockdowns and travel restrictions have hindered the ability of investors to conduct due diligence on new strategies and relationships, with 46 percent of institutions reporting that they will prioritize re-ups with existing managers over the near-term. The results indicate that only 17 percent of respondents are willing to consider investing with new managers, and 18 percent are on hold when it comes to establishing new manager relationships. Summarizing this sentiment, one Americas-based public pension fund said that it has “hit the pause button” with respect to new manager relationships, citing the need to better understand what the “new normal” looks like.

As it relates to investment activity, numerous institutions took advantage of pricing dislocation in April and May, allocating capital to public equity and debt securities. In examining the current investment posture, Hodes Weill confirmed that 59 percent of institutions intend to play a mixture of offense and defense going forward, favoring distressed and high-beta strategies with less interest in core. However, most are looking for clarity on asset valuations and impacts to fundamentals before aggressively pursuing distressed opportunities. While some institutions are actively investing in distressed strategies, others are more cautious and believe that true distress will take time to emerge.

Looking across property sectors, institutions are prioritizing investments in logistics, data centers and multifamily given the underlying fundamentals supporting these asset classes, which have strong macro-demand drivers and have been positively impacted by behavioral shifts related to the COVID-19 crisis. Investor sentiment is not yet clear on office properties, as shifts in demand following the pandemic remain uncertain. Not surprisingly, investors are very cautious about the retail and hospitality sectors, which have been hardest hit by COVID-19.

Hodes Weill noted that the denominator effect, which some predicted would slow deployment of new capital to the asset class, has yet to impact allocations and may be less of a factor due to portfolio write-downs and the recent rebound in public equities. Moreover, institutions remain cautiously optimistic about the performance of real estate over the next 12 months as compared to other asset classes. One sovereign wealth fund noted that prior to recently writing down its portfolio, it was over-allocated. However, after marking its assets to market, they are currently under-allocated.

The post Investors Remain Optimistic About Commercial Real Estate, says Study first appeared on Housing Market Marketing by Housing Market Group.

1. In a unexpected twist, couples planning to tie the knot — while disappointed their wedding plans have been cancelled due to COVID-19 — are not letting that money sit idly. COVID-19 is not stopping them from building their life together emotionally and financially.

According to Rakhee Dhingra, CEO of Mortgage Savvy, "We recently had the pleasure of assisting a few first-time homebuyers who were scheduled to get married this summer. Unfortunately, due to the current environment they had to postpone their wedding. Based on the money they received back from their deposit cheques, they were able to allocate those funds towards buying their first home — one where their family can build long-lasting memories and grow into long-term.”

2. Another emerging trend is the backyard and home renovation. It is safe to say many are hesitant to travel this year until at least a vaccine is found and the result — a staycation option. Rakhee herself has been putting off her backyard reno in favour of travel but has decided this year the travel budget is being shifted toward home investment.

She went on to say, "during COVID-19, we’ve been able to support many clients on the refinancing front. By leveraging existing equity in their homes, many clients have been able to do some much needed home renovations. Doing so, not only gives them the opportunity to invest back into their home and appreciate the overall value of their property, but also design their home to reflect more of their current needs."

Weeks of isolation has given us a very clear idea of where we spend our time in our home and highlights what has worked and what has been working as well. Our son Kev and his wife Ellen are literally expecting their second child in days. Currently living in a two-bedroom home is ideal for their current situation but are concerned as the family grows and did I mention their two dogs, their home isn’t going to be as ideal as it once was. Thoughts of moving were explored and then tempered by the sheer logistics of it during a pandemic and the costs. Their solution is to build on the existing structure with great savings from the land transfer tax costs combined with real estate fees being redirected towards their home renovation.

For families that are growing, backyards that have overgrown, and with more Canadians working from home, a renovation can be both financially savvy and emotionally satisfying.

3. Cottage life isn't for everyone and travel to the cottage due to the pandemic has been restricted in some communities for now. However, that hasn't stopped people from exploring in a low-interest rate environment a second or even investment property. Land, water, fresh air and no air travel can be very appealing. It is still early days however, based on the number of requests I've had — 3 to date from people thinking about buying in cottage country, you know waterfront supply and demand will soon kick in and prices will continue trend higher.

Real estate for most is our largest asset and our greatest liability. But our home is so much more, it is also a place of pride and comfort. During periods of difficulty hunkering down in your home can have a calming influence in a time when you feel you have little control over much else.

These may be just a few of the early and unintentional trends in real estate that have evolved out of a pandemic but that doesn't mean that it is a bad thing.

The post Three real estate trends emerging from the coronavirus pandemic first appeared on Housing Market Marketing by Housing Market Group.

Many overseas investors are pushing ahead with buying decisions in order to complete transactions before the tax is enacted. And while the COVID-19 pandemic has altered the way people are conducting their property search, a flurry of activity is expected once the situation passes.

“Demand for London and UK real estate has not waned since Savills experienced a surge in sales in December 2019 and January 2020. Our webinars globally are fully subscribed each week and I think now more than ever buyers are readying themselves to transact as soon as global travel restrictions are lifted,” Chris Pratt, an agent at Savills, explained. “There is strong interest in stock complete developments as buyers look to purchase before the additional stamp duty charge of two percent comes in from April 2021.”

Investors based in Asia may not be able to close property transactions just yet, but that hasn’t dampened demand for London property in the region.

“We are seeing Mainland Chinese and Hong Kong nationals driving the majority of the international interest. Other markets who are currently still in lockdown, such as Singapore, Malaysia, Thailand and the Middle East, are using this time to research the market and carry out their due diligence,” Pratt noted.

Many UK property professionals have noticed a correlation between the status of a country and where investors are in the buying process. When a country exits lockdown, buyers quickly make enquiries having already completed the information gathering phase.

“We are currently seeing an upsurge in enquiries from the Asia. We’ve found that buyers in territories which have now relaxed lockdown restrictions like China and Hong Kong have returned to the market and this is where enquiries are coming from,” James Lane, Head Of Sales at Capco, stated. “Many of these investors were already considering London as an investment proposition so the virus sought only to pause their interest for a time, while others attune to the ebbs and flows of sterling are now looking to see how they could potentially benefit from currency fluctuations.”

Capco has been offering video conference calls to accompany virtual tours which Lane proclaimed have been very popular with clients overseas.

“With travel restrictions, our agents are still able to show buyers what their new home will look like as well as the proximity to nearby universities, famous landmarks and transport hubs on interactive maps which is key to them making a decision,” Lane said.

What are buyers looking for in London?

According to Lane, Chinese buyers are looking for investment opportunities but are also thinking about education opportunities abroad. This has led to strong demand for London property in the city’s prime areas.

“Overall, we have found that enquiries are still coming in as investors are attracted to the traditional and low rise residential area of Fulham, the proximity to schools and universities but also during this time hospitals; there are some excellent medical facilities on the doorstep and we expect this to form part of the sales conversation going forward in a way that wasn’t so obvious before,” Lane explained.

One project that has seen a lot of interest among overseas property investors is Lillie Square. The development’s first phase is completed and move-in ready with the next phase set to launch shortly.

“Due to where we are in the build phase at Lillie Square we are also in a good position to appeal to investors who want to purchase an apartment which is already completed and ready to move into,” Lane noted. “Buyers have peace of mind that their home won’t be delayed should there be new guidance from the government on social distancing for construction.”

Despite some challenges, there haven’t be any major shifts when it comes to demand for London property. In fact, the only real change in international buying preferences is in regard to location, but even that has been relatively minor.

“There are investors looking for big discounts, but no more than usual. We have seen a slight shift to the prime locations that offer familiarity to an international buyer,” Pratt said. “Demand is as high as its been for four years, however transactions are lower due to the logistics of making a purchase during a lockdown.”

The post Demand for London property from Asian buyers unaffected by COVID-19 pandemic first appeared on Housing Market Marketing by Housing Market Group.

Unfortunately, not everyone has the luxury of hitting pause on selling their home. Regardless of a global pandemic, the world is still spinning and life, while looking completely different from just a few short months ago, must continue forward. And if you fall into that category, we can help. So grab a pen, flip to a new page in your quarantine journal and get ready to take some notes, because class is in session. 

Now before we jump right in, there are a few things to keep in mind:  

First, while selling a home during social distancing will require a different approach, real estate has been deemed an essential business in most areas and real estate professionals have quickly responded by adapting new technology focused approaches. 

And second, like you, there are many people who will have to move regardless of a pandemic. Whether they accepted a new job, are expecting a child, or already sold their old home, buyers  are out there despite the swirling uncertainty. With concerns about the safety of open houses and showings, selling a home is going to be more difficult, but it’s not impossible.

Now, let’s roll up our sleeves and jump in.  

1. Hire A Real Estate Professional

If you’re a frequent reader of our blogs or News & Insights, you’re probably thinking this bit of advice sounds like a broken record. But it’s for good reason. You should always consult a real estate professional when buying or selling a home, regardless of a sweeping global pandemic. For most people, their home is their largest single asset and a real estate professional can act as your sage guide through the ups and downs, and often emotional, sale process. A seller’s agent can help stage the home or suggest how to declutter, take listing photos, provide marketing materials, organize showings and open houses (video or live), prepare documents for closing, etc. Additionally, they have their ears close to the ground and will be able to give you realistic expectations for selling your home during these highly unusual times. Follow this bit of advice and you’re already off to a great start. 

2. Consult Your Real Estate Professional About A Virtual Tour 

Technically, this is more step 1.5, but bear with me. If you followed step one, the next step is to ask your agent about their marketing strategy — you want someone who has adapted their business to meet how the industry has changed. Are they using video or virtual tours? How are they producing the listing photos, handling showings, etc?

Many agents are now offering virtual open houses and tours, and are moving much of the offer process online. This means you can get eyes on your home without having to open your door to strangers. Depending on time, budget, and location you can choose from several options: a simple video your agent takes while performing a walkthrough, 1-on-1 virtual tours with potential buyers, and even 3D renderings of your home. 

3. Turn Quarantine Time into DIY Time 

Instead of having Netflix ask if you’re still there for the fourth time in a day, use all this time at home to your advantage and tackle some home DIY projects that will give your home the glow-up it deserves. 

No need to go overboard, a little spackle and paint will go a long way toward refreshing old doors, walls, and trim that are showing a little wear and tear. Additionally, this is a great time to take care of those pesky maintenance tasks you’ve been neglecting such as cleaning your gutters and washing those hard to reach windows. We offer a full list of things to tackle while you’ve got some extra quarantine time on your hands and much more on our home improvement page. 

4. Make a Great First Impression 

Anytime you’re selling a home you need to make sure your home has a well maintained exterior — a freshly mowed lawn, a yard free of dead tree limbs, an organized porch free of clutter, etc. While this should always be your goal while selling a home, it’s especially important right now during these coronavirus stricken times because the exterior is the only part of the home a potential buyer can see in person if they drive by. However, they may lose interest in the property if they don’t see what they like on the outside.

While most of the home-selling journey has gone digital, that’s not going to stop potential buyers from doing a drive by and checking the place out from the road. First impressions count, so make sure your home has its best foot forward. 

5. Spread The Word With Social Media 

Ahhh social media. The “tool” that once offered endless scrolling of memes and cat videos has now become an integral part of keeping in touch with friends, family, and loved ones during these times of quarantine. 

Leveraging your “friends” online can help spread the word that you’re selling your home and could lead to finding an interested buyer. Now’s the time to post those fabulous photos of your home and the best part is, it’s free! This last step is simple yet effective in increasing attention for your listing. And you never know if one of your friends is looking or knows someone who is. Just make sure to go easy with the filters. No need to “facetune” your master bath.

The post Five Steps for Selling Your Home During a Pandemic first appeared on Housing Market Marketing by Housing Market Group.