Survey: Sellers not yet lowering prices because of COVID-19
While real estate transactions have slowed to a near crawl in most of the country because of COVID-19 (coronavirus), sellers are not panicking and, for now, seem to be willing to wait out the pandemic.
According to a new survey from the National Association of REALTORS®, in which the trade organization polled a sampling of its own members in the final week of April, 76 percent reported that their selling clients have not reduced the listing price for their property in an effort to attract a buyer – and that’s an uptick of two percent from the same question asked the previous week.
“Nearly 70% of Americans have secure employment and those interested in purchasing homes are looking at the enticing mortgage rates,” said NAR Chief Economist Lawrence Yun. “One in five potential buyers have dropped out of the market due to job loss concerns, hopes are the massive financial stimulus package can help replace a good portion of lost income until the economy steadily reopens. More home sellers are needed to relieve the acute inventory shortage.”
While there may be less interest than normal in buying homes due to the coronavirus, that does not mean interested buyers are not still out there. The Economic Flash Survey which was conducted April 26-27, suggested that sellers are remaining calm and likely waiting for the economy to course correct once the pandemic subsides.
“Consumers are mostly abiding by stay-in-shelter directives, and it appears the current decline in buyer and seller activity is only temporary, with a majority ready to hit the market in a couple of months,” Yun said. “The housing market faced an inventory shortage before the pandemic. Given that there are even fewer new listings during the pandemic, home sellers are taking a calm approach and appear unwilling to lower prices to attract buyers during the temporary disruptions to the economy.”
In addition to the patience being shown by sellers, the survey found that 30 percent of REALTORS® said they have still been able to complete all aspects of a real estate transaction while practicing social distancing policies, and highlighted virtual tours, social media and e-signatures/e-notarization as the technological tools that have been the most handy in replacing in-person requirements from before the outbreak.
As for renters and landlords, the survey also showed slight declines, as residential tenants who have not been able to pay rent because of economic impacts to their personal finances have mostly been having delayed payment requests accommodated.
A little more than a third (36 percent) of property managers said that have been able to accommodate their tenants who cannot pay rent, a drop of 11 percent from the previous week. However, the percent of individual landlords able to accommodate late payments (27 percent) increased slightly from the previous week.
A total of 42 percent of tenants who pay rent to a property manager and about 61 percent of tenants who pay rent to an individual landlord hade no issue paying the rent on time in April.