The real estate industry is abuzz with talks about a housing market crash due to the spread of the coronavirus pandemic. It’s not surprising that such fears would arise amidst the current state of the US stock market. And with home buying and selling being a people business, it’s hard not to think that quarantines and fear of contact with others would severely hurt the housing market. However, preliminary US real estate market data shows that, although there is a negative correlation between COVID-19 and the market, so far, there is no reason to panic- only reason to be cautious.
US Real Estate Market Data – March 2020
The National Association of Realtors (NAR) conducted a survey of 70,036 residential members on March 9th and 10th of 2020. It’s important to note that 7,000 of those surveyed operate in the Washington and California real estate market where a large portion of US coronavirus cases have been confirmed. The survey’s questions revolve around current mortgage rates in 2020 as well as home buyer and seller behavior across the US real estate market. Let’s take a look at the results:
How Has the Change in Mortgage Rates Affected Sellers?
Dropping mortgage rates has been big news in the US real estate market since the end of 2019. However, in the face of the coronavirus spread and the drops in the stock market, mortgage rates are forecast to drop even further. NAR members were asked how the mortgage rates have affected seller behavior:
All Members:
- 88% – no change in behavior
- 9% – more sellers on the market who want to then buy a home with lower mortgage rates
- 4% – sellers removing their listings from the market and refinancing
California Members:
- 84% – no change in behavior
- 12% – more sellers on the market who want to then buy a home with lower mortgage rates
- 4% – sellers removing their listings from the market and refinancing
Washington Members:
- 89% – no change in behavior
- 6% – more sellers on the market who want to then buy a home with lower mortgage rates
- 6% – sellers removing their listings from the market and refinancing
Learn more about the changes in mortgage rates: What the 0% Interest Rate Means for Mortgage Rates.
How Has the Change in Mortgage Rates Affected Buyers?
When it came to buyer clients, NAR members were asked how their real estate clients felt about both the change in mortgage rates and the state of the US stock market:
All Members:
- 50% – no notable change
- 13% – stock market changes have lowered buyer confidence, despite low rates
- 37% – buyers are excited about the lower mortgage rates, despite the stock market changes
California Members:
- 50% – no notable change
- 13% – stock market changes have lowered buyer confidence, despite low rates
- 37% – buyers are excited about the lower mortgage rates, despite the stock market changes
Washington Members:
- 54% – no notable change
- 12% – stock market changes have lowered buyer confidence, despite low rates
- 34% – buyers are excited about the lower mortgage rates, despite the stock market changes
How Are Buyers Responding to the Coronavirus?
The NAR survey asked members how the coronavirus has impacted buyer interest in their locations across the US real estate market:
All Members:
- 3% – significantly decreased
- 13% – decreased
- 78% – no change
- 5% – increased
- 1% – significantly increased
California Members:
- 5% – significantly decreased
- 16% – decreased
- 70% – no change
- 6% – increased
- 3% – significantly increased
Washington Members:
- 3% – significantly decreased
- 16% – decreased
- 74% – no change
- 6% – increased
- 2% – significantly increased
How Are Sellers Responding to the Coronavirus?
For sellers in the US real estate market, NAR’s survey looked at a few different ways that the coronavirus pandemic has affected seller behavior:
Number of Homes for Sale
All Members:
- 1% – significantly decreased
- 9% – decreased
- 87% – no change
- 2% – increased
California Members:
- 2% – significantly decreased
- 12% – decreased
- 83% – no change
- 2% – increased
- 1% – significantly increased
Washington Members:
- 1% – significantly decreased
- 14% – decreased
- 82% – no change
- 3% – increased
Number of Sellers Who Have Pulled Listings Due to COVID-19
All Members:
- 16% – not sure
- 81% – no
- 3% – pulled listings completely
California Members:
- 20% – not sure
- 76% – no
- 4% – pulled listings completely
Washington Members:
- 16% – not sure
- 79% – no
- 5% – pulled listings completely
Changes in Seller Behavior in the US Real Estate Market
The survey took a look at other ways in which seller behavior has been affected. Across most members, the survey found there was no noticeable difference in seller behavior. 7% of all members reported canceled open houses. Read the rest of the results of the NAR Flash Survey here.
Final Words
This new data reveals that the spread of the coronavirus is starting to have a negative impact on home buyers and sellers in the US real estate market. At the same time, many experts are confident that, because the housing market, as well as the US economy, were at a strong point before the outbreaks, the market will be able to come out mostly unscathed. Early forecasts show that we will likely not be seeing a repeat of the housing market crash of 2008. At the same time, all players in the real estate market need to be cautious as we move forward in 2020 and keep a close eye on how things will unfold in the coming weeks and months.
Sign up now to Mashvisor to stay updated on real estate news around the US.
Want to learn more about how the coronavirus has affected the US housing market? Check out these resources:
- The Effect of the Coronavirus on the Seattle Real Estate Market
- The Effect of the Coronavirus on Airbnb Seattle
- The Effect of the Coronavirus on Airbnb NYC
- Airbnb Hosts Feeling the Effect of the Coronavirus