The coronavirus is causing potential homebuyers in the Tucson market and nationwide to hesitate because of jitters about layoffs, reduced work hours or furloughs.
Across the country, viewings of homes for sale are down — both due to social distancing and hesitation to make a major purchase.
“The U.S. housing market has entered truly unchartered territory, shaken by the COVID-19 pandemic and a corresponding, sharp economic contraction that has already caused millions of Americans to lose their jobs,” said Zillow economist Jeff Tucker.
The year started out strong for the housing market with mortgage rates low and homebuilder optimism high.
“Pending home sales rose to their highest level in three years in February ... reinforcing the notion the housing market was on solid footing to begin the year,” a Zillow report says. “But, while pending home sales are normally a decent leading indicator of actual closed sales four to six weeks later, these aren’t normal times.”
Housing experts believe the majority of pending sales fell through in March due to cold feet, job losses or unavailability of services such as appraisals and inspections.
At the beginning of the year, home showings across Arizona were on pace with 2019 showings until about March 12 when they dipped about 37% through the end of the month, according to data from ShowingTime, a management technology provider to the residential real estate industry.
“As communities continue to respond to COVID-19, we will continue seeing expected declines in showing activity in most markets, particularly in those that felt the greatest impact in the 2008 housing crash,” said Daniil Cherkasskiy, chief analytics officer for ShowingTime.
Locally, the drop-off in viewings has not been as dramatic.
New listings and home closings were down in the last two weeks of March, compared with the first two weeks, but still in the single digits, said Kevin Kaplan, vice president or marketing and technology with Long Realty Co.
Instead of attending open houses, many homebuyers are opting for virtual tours of homes.
“It’s really interesting how fast our industry can adapt,” he said. “Most transactions can be done remotely, and if someone does want to see a house in person it’s by appointment only, following CDC guidelines.”
Via a virtual open house, a Realtor can take a potential homebuyer through the house, pointing out certain features and opening cupboards and closets.
Kaplan said the current crisis is different from the housing crash in 2008.
“The 2008 crash was financial,” he said. “This is an external event.”
While there is concern, there is also optimism since the “fundamentals around the housing market are strong,” Kaplan said, referring to good home equity in Tucson homes and low mortgage rates.
And, with many homeowners working from home for the foreseeable future, a bigger space might be something they’re considering.
“A home,” Kaplan said, “means something different now.”
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