Chasing The Dream: American Thirst For Home Ownership Defies Pandemic Angst

Written by Posted On Friday, 03 July 2020 05:00

‘Housing could be a leader in the post-pandemic economy,’ read a recent Dallas Morning News headline.

‘Economists predict shifting real estate trends may cause a suburban boom in housing market,’ reports the Seattle Post Intelligencer.

‘While the COVID-19 crisis has sent shockwaves throughout the world,’ says the Urban Land Institute’s latest Real Estate Economic Forecast, ‘real estate economists are predicting a light at the end of the tunnel.’

Indeed, for real estate brokers across the country, the surge in buyer interest has triggered a mini-boom in real estate few could have predicted early in the year as a deadly pandemic gripped the world and threatened the U.S. economy.

“Going in, we had no sense of what might happen,” noted Drayton Saunders, president, Michael Saunders & Co., Sarasota, Fla. “The sudden drop-off in March and April took the wind out of the sails of our outlook at the start of the year.”

But what’s happening now, Saunders said, is “our February narrative on steroids, as buyer demand, short inventory, and low interest are fueling bidding wars and multiple offers across the price spectrum, especially in mid-priced homes.”

Buyers with stable incomes are ready to move, said Saunders. “They know they must be able to compete. They are coming in pre-qualified and prepared to offer more than the listing price because there’s such a low supply of available homes.”

As prices begin to inch up, he said, listings are slowly coming back, primarily because sellers who held back because of the health crisis are coming back in post-lockdown.

“We have more listings now than we did three or four weeks ago,” Saunders said. “But potential sellers, even as they overcome pandemic fears, are apprehensive about where they will move, given the short supply of homes they will have to choose from.” 

It’s a startlingly commonplace challenge.

“People working from home, or spending more time at home, want more space, a bigger yard, a home in the quieter suburbs,” said Joan Docktor, president, Berkshire Hathaway HomeServices Fox & Roach Realtors, serving Pennsylvania, New Jersey and Delaware. “Even in the high end, with homes over $1 million, we’ve closed 303 sales this year, an insignificant   two percent under the 299 such sales we posted in the year ago period.”

On the coveted New Jersey shore, she said, where home range from $750,000 to over $1 million, sales are up 14 percent over last year.

But supply is tight, she said, echoing Saunders, because potential sellers fear they will have nowhere to go.

“Strict sanitary procedures are still in place and sellers are a little less wary about opening their homes to strangers,” Docktor said. “But much of the inventory bought up during the 2008 recession is standing firm - especially at the low end, much of which was snapped up by investors - and new inventory is hard to come by.” 

New construction is slowly coming back, Docktor said, and that will help. But unless the inventory crush is eased, she expects the current buyer frenzy will continue to fuel the market at least through the end of the year.

The outlook is widely held.

“Demand has been incredible in our market,” said Robin Sheakley, president, Sibcy Cline Realtors in Cincinnati, Ohio.  “Many people who have been renting and experiencing rising rates have realized what their buying power is, given today’s low interest rates - and the stay-at-home orders have had everyone reflecting on their housing.”

While the demand for high end properties is not quite as frenzied as at the lower price points, she said, it is certainly stronger than it has been.

“In this time of low inventory, even high-end homes that have been on the market for a while are now moving,” Sheakley said.

The mini-boom is being felt far out into the suburbs.

“People are weighing commute versus price, and putting a high priority on a home in the country over being close to the office,” said Greg Zadel, founder of Zadel Realty in Firestone, Colo., a small community some 20 or 25 miles from the Denver, Longmont, or Boulder business hubs.

Zadel, whose three-agent team serves a rural area known for its open spaces and outdoor recreation, also ranks as one of the safest communities in the state, according to FBI crime report statistics.

In the current environment, Zadel said, the town is a ready choice for city folks who want to get out of town. 

“We don’t have a feeding frenzy here yet,” he said. “But we are seeing multiple offers on right-priced properties, and we expect to see more of that going forward.”

How sustainable is this buyer-driven market environment? 

“As long as staying home continues to be encouraged, and interest rates remain low, people will desire housing that matches their needs and desires,” said Sibcy Cline’s Sheakley. “Many people are finding that they enjoy being home, and this, too, will help sustain the demand.”

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Barbara Pronin

Barbara Pronin is an award-winning writer based in Orange County, Calif. A former news editor with more than 30 years of experience in journalism and corporate communications, she has specialized in real estate topics for over a decade. She is also the author of three mystery novels and two non-fiction books.

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