This is usually the season when houses flood the real estate market. But many potential sellers may be holding off on listing their homes because of their own financial uncertainties, their concerns that the market may be too disrupted to fetch a good price, or their worries about the prospect of strangers (and the germs that travel with them) coming into their homes.
The MetroTex Association of Realtors, which keeps up with real estate in North Texas, recently released its housing report for March 2020. Like their reports for the two months prior to that, it showed that the inventory of homes for sale has been steadily holding at about a three-month supply--that’s roughly half of what is generally considered optimal in the real estate market. The properties that are for sale may have less competition than they normally would right now. And the report by MetroTex showed that prices have been 5.9% higher than in the same period in 2019.
We spoke with realtor and broker Joe Atkins, of Joe Atkins Realty. (Full disclosure: Atkins is the cousin of WFAA sports journalist Joe Trahan). Atkins, who has held leadership positions with MetroTex, the Texas Association of Realtors and the National Association of Realtors, echoes what those organizations were indicating several months ago: 2020 was shaping up to be a banner year prior to the pandemic.
“The year started off extremely strong…here in our office even with Corona[virus], our sales in the first quarter were up 65% over last year,”
Watch the full interview here:
Atkins says even under "stay-at-home" orders in March and April, sales remained strong, even as showings became strange.
“I showed up to a listing appointment in April, and that was the first time I had on the N95 mask. And the seller opened the door and looked at me like I was an alien," Atkins said. "And I said, 'Sorry, I have to do it.' I had my gloves and mask on and now it’s the new normal…it’s abnormal if you don’t have a mask and gloves on. We are wearing masks, gloves, booties, sanitizer. We are advising sellers if you are occupying the home, leave all the lights on, all the doors open. That way you don’t have people touching things as they move through the house.’’
Interest rates are touching near-historic lows. Earlier in the year, many existing homeowners raced to refinance their mortgages. Atkins said that caused home sales to take longer to close. But he said that refinance boom seems to have faded recently, and that closings are back to taking the usual amount of time.
Regarding rates, Atkins was taken aback when one buyer he worked with recently got a 30-year conventional loan at a 2.875% rate.
"That's unheard of."
But buyers beware. With unemployment soaring and wage losses commonplace in the era of COVID-19, lenders may be more concerned than ever about your finances as you go through the loan application process. Many are now requiring things like 20% down, a credit score of at least 700 and that you have six months worth of mortgage payments saved up in reserves.
“What if you have issues with people and their employment going forward and they can't make their payments? Banks are in the business of lending. They are not in the business of holding homes. So, they are making their guidelines stricter,” Atkins said.
The Texas Association of Realtors reports there is a lot of uncertainty in real estate going forward through the rest of the year. At least one well-known figure in the local housing industry has predicted some painful times ahead.
Atkins said he has been talking with a lot of other realtors in North Texas. He said they are generally confident that the market is stronger and more resilient than many real estate markets. Atkins predicts if cases go down and stay down, more sellers who have waited on the sidelines may jump into the market, greatly expanding inventory. In fact, he thinks ‘the season’ for real estate will just be delayed.
“I really think our spring season will get pushed back. Now is usually the hottest time to sell your house. I think that will be pushed back to late summer or early fall," he said.
That’s his educated guess right now. But these are not normal times. Several months ago, he wouldn’t have guessed he would be showing homes while dressed in personal protective gear. As always, before you buy or sell your home, you should do your research and seek professional advice before making decisions.
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