While the United States has seen its share of health crises over the years, COVID-19 has had an unprecedented effect on the way people live, with no clear indication of how long our lives will continue to be impacted. Hence, it’s not surprising that in a recent survey* I conducted, ‘unsure of the future in general’ was the top answer to the question ‘What do you feel, either for yourself or for people in general, are the top 3 reasons why Coronavirus is affecting real estate?’, with 76% of respondents choosing this as one of their top reasons.
I conducted this survey to help decipher for myself the barrage of information I receive, from both the real estate industry and general news media, about how COVID-19 is changing plans people had to buy or sell residential real estate. However, I feel the results of the survey give some insight into how many of us feel in general about the sudden change we’ve all experienced in the way we work, shop, interact and learn since the beginning of the year.
On the question noted above, asking why people may feel COVID-19 is affecting real estate, regardless of whether or not the respondent had plans themselves to buy or sell real estate, three answers stood out. Besides ‘unsure of the future in general’ (76%), ‘layoffs / job furloughs’ (68%) and ‘stay at home orders’ (48%) were the top responses. While no other response was chosen by more than 28%, every possible response was chosen by at least one person. With record low residential property inventory being an issue in many areas across the country for quite some time, it’s interesting to note that ‘lack of houses on the market for buyers’ was the least chosen response. So, for now at least, it appears that COVID-19 worries clearly surpasses typical real estate industry issues in many people’s minds.
Here is a look at all of the responses:
76% unsure of the future in general
68% layoffs / job furloughs
48% stay at home orders
28% using savings for other necessities
28% wanting to stay home to reduce risk of exposure
12% lack of buyers for people trying to sell
8% tighter lending restrictions
4% lack of houses on the market for buyers
0% I don’t think Coronavirus is having any effect on real estate (Okay, so there was one option that no one chose!)
Among the reasons given by those who chose ‘other’ were:
“Many people suffered significant losses in the stock market. The money they may have had available in 2019 is no longer available. Taking any money out now, would seal the deal in terms of ever getting that money back when the market does come back.”
“Don’t want to over-spend on a home that (may) lose value over the next years. Happened to me in 2008.”
“I am hoping prices drop to a reasonable fee.”
“adding debt that will need to be paid during this”
More specifically on the topic of real estate, the survey asked ‘If you planned to have a residential real estate transaction this year, has the Coronavirus pandemic changed your plans?’. For 44% of respondents, this question was not applicable. Among those for whom the question applied, the majority are either undecided on what to do or have decided to wait until 2021 to complete their transaction, with each answer receiving 36%. Roughly a quarter of respondents feel they will be involved in a real estate transaction this year, with 14% choosing ‘Yes. I had planned a transaction for early 2020 but I am delaying that until later in the year’ and another 14% choosing ‘My transaction should take place as scheduled before the end of the year’.
Here is a recap of the responses of those for whom this question was applicable:
36% Yes. I had planned a transaction for 2020 but I will probably wait until 2021
36% I am undecided on what to do
14% My transaction should take place as scheduled before the end of the year
14% I had planned a transaction for early 2020 but I am delaying that until later in the year
0% I already completed my transaction
The real estate industry, like so many others, is adapting to new ways of conducting business. Yes, there are still houses coming on the market, and there are still people buying homes. Of course, there are a variety of new rules and regulations in place, to ensure the safety and health of those involved in real estate transactions. These rules vary based on where you live, and they are constantly evolving. As the saying goes, This too shall pass, and life will eventually return to normal, although it may not be the same normal as we had prior to 2020. Having conducted this survey I feel I have a better understanding what is truly on people’s minds. I understand that many people are dealing with much bigger issues than real estate. However, for those who still plan to / need to buy or sell residential real estate, even during these trying times, the real estate market continues to move forward.
Top image credit: Photo by Jude Beck on Unsplash[I have strived to keep politics out of this article, and I ask that you refrain from bringing politics into this discussion in your comments. Thank you.]
Richard Slifkin, Broker/Realtor®
Highgarden Real Estate
Serving the Lake Norman and Charlotte, NC Area, including: China Grove, Concord, Cornelius, Davidson, Denver, Huntersville, Landis, Kannapolis, Mooresville, Salisbury, Sherrills Ford, Statesville and Troutman.
The survey was created using the eSurvey Creator website. The survey link was distributed to an unknown number of individuals nationwide with responses tracked between April 29, 2020 and May 10, 2020. The survey link was distributed directly by email to approximately 75 people with whom I have had previous contact with, who have indicated a previous interest in real estate. The survey link was also distributed via social media on Facebook, Twitter and Instagram to an unknown number of individuals. A total of 25 responses were received from the survey. While the question ‘What do you feel, either for yourself or for people in general, are the top 3 reasons why Coronavirus is affecting real estate?’ asked for respondents to choose three out of 10 possible options, there was no limit on the options a respondent could choose and some may have chosen either more or less than three. The question ‘If you planned to have a residential real estate transaction this year, has the Coronavirus pandemic changed your plans?’ was limited to one answer/option per respondent.