Local real estate market remains strong through quarantine
By Rachel Madison
The first half of 2020 has been anything but predictable, and even though uncertainty has been at the forefront of most people’s minds, the art of buying and selling homes hasn’t skipped a beat.
In fact, according to the Austin MLS, 321 homes have closed within the Liberty Hill Independent School District’s boundaries in the last 90 days. In comparison, in 2019 during those same 90 days, just 259 homes closed.
Shelley Clawson, agent at Mallach & Company, said if anything, her business has increased over the last few months.
“The spring and summer selling season is always busy no matter what’s going on, but during the corona situation with all the new guidelines and recommendations, I would say there were maybe a couple weeks where there was a lull,” she said. “We began offering virtual showings immediately, and I had a client right away who bought a home based on that, which was promising to me as an agent.”
Amy Gandy, broker associate with Realty Austin, said back in March when the virus hit, traffic in her listings died down, and some of her homes were temporarily taken off the market, but within four to six weeks, things got busier than before, and now she’s having her best year ever.
“Once the Governor started opening things back up, the demand was back in full force,” she said. “I was seeing multiple offers on properties. And there were a lot of serious buyers who had already been competing in the market. They saw this as an opportunity to be the only one bidding on a house.”
Shane White, owner and broker at RE/MAX Town & Country, said the market did slow down as far as number of transactions and closings, but from a value standpoint, as buyer activity slowed, so did seller activity.
“That was good, because we’ve been in a seller’s market for the last four to five years,” he said. “We’ve had anywhere from two to two and a half months supply of inventory, and that stayed the same. The market held really well.”
As things began to open in May, activity on the buyer’s side has increased significantly, White said, adding that just last week, his office of six agents put eight properties under contract.
“In our area, the number of pending listings, meaning homes under contract, for the last three to four weeks is up 10 percent or more over the same weeks last year,” he said. “The real estate market is not going to see a hit. I think we’re set up to finish the year very strong.”
Adrienne Hughes, broker and owner of Hughes & Company Real Estate, said she had some sellers who pulled back because they were afraid to have people walking through their homes, but what that did was reduce inventory and put her into multiple offers on the houses that were left.
“The pandemic did cause a deficit in the market,” added Cheryl Stephens, agent at Hughes & Company. “But that was good for sellers and caused buyers to go into multiple offer situations. The sellers that wanted to sell did and they did very well. I did not have to lower one price. All the prices stayed at market value.”
Stephens said one reason the real estate market has done so well over the last few months is because interest rates are at an all-time low. Currently, the rate is sitting at approximately 2.75 percent.
“People could actually enter into the home market because of the interest rates,” she said. “People who couldn’t buy homes before can now. Just a 1 percent difference is huge. We saw rates dip during COVID, which sparked more interest, and they were already low. We put a lot of first-time home buyers into homes around the area.”
Stephens added that lenders are “going crazy” because people are able to move out of their house, get a better rate and buy a bigger house for what they’re paying now, which means people are selling and moving up because they can get more house for less money.
Hughes said online shopping for a home has also been a big part of why the market has stayed afloat.
“People had time to sit at home and get on our site and start looking at prices, even when they weren’t thinking about buying a home before COVID,” she said. “Being stuck at home prompted them.”
Clawson agrees that business has been good over the last few months because people have had more time at home and have realized where they are living isn’t conducive to their lifestyle.
“People are saying, ‘We want a bigger backyard,’ or ‘We can’t afford this and we need to downsize,’” she said. “All that comes into play when you have time to think and the world has stopped. There are also people who don’t trust having all their money in a 401k or stock, so they want to have it in something tangible, and what better way than real estate? A home is something that won’t go away and has a great return on investment.”
Gandy agreed that people staying home more has given them a chance to think about their circumstances.
“My farm and ranch business has really taken off, because a lot of people are looking for more sustainable living—somewhere they can have a garden and chickens,” she said. “I’m doing a lot more land purchases.”
Clawson said ultimately, people still want to buy and sell homes—they’re just doing it in a different way now. From not writing physical checks anymore for option money and submitting it through PayPal or Venmo instead, to the inspection where everyone must sign a COVID-19 disclosure beforehand, things are different, she said.
“Even the title companies are now doing remote closings, closings in the home, closings outside,” Clawson said. “Realtors are not allowed at closings right now. Only people who need to sign are allowed and that’s it.”
Technology has been a major factor in the real estate industry staying successful. Office meetings are done virtually, as well as client meetings. Virtual 3D tours have become the norm when it comes to buyers searching for a home.
“That was something we only saw rarely before, but now we see it across the board,” Gandy said. “There will be some agents who will go back to traditional open houses, but we’re seeing virtual open houses are just as effective online. A lot of us may not ever go back to traditional open houses.”
Hughes said online notaries have also started to be used at closings.
“This is something that’s never been done before,” she said. “This is one of the things that’s still old school about real estate, is manually signing that huge stack of documents on closing day. With everything going electronic, you can get into a queue to see the notary virtually. They’ll look at your ID and watch you electronically sign.”
She said these new practices will only be enhanced as times goes on.
“We’re seeing a lot of things being streamlined because we’ve been forced into it,” she added.
Gandy added that buyers will have to learn to be more flexible because of all the precautions now in place.
“We used to try to make it easy to see houses, but now it’s harder to show homes,” she said. “You have to have a lender approval letter and sign a COVID disclosure that says you haven’t been sick or traveled or been around anyone who is sick. However, this new process is weeding it out to serious people who are serious about moving.”
Stephens has also implemented several precautions for clients when showing homes. Her firm’s protocols include removing and leaving shoes outside the home; using a disinfectant wipe on the house key and the lockbox after returning the key; touching as few surfaces as possible during the visit; avoiding touching light switches or doors; and not using any restrooms in the home.
“We don’t want anybody to feel like they can’t put their house on the market because they’re afraid,” she said. “We want people to know they’ll be protected, and we will keep their homes clean.”