The housing market faced uncertainty in March, but now ‘it’s a circus’
The housing market faced a lot of uncertainty when COVID-19 caused the real estate industry to pause under shut-downs, but low interest rates and the desire for more space have turned this year into a boom time for real estate agents.
“It’s been a circus, really,” said Anthony Lamacchia, Realtor and owner of Lamacchia Realty in the Boston suburbs. “Anything right outside of Boston is going like wildfire, but especially the single-family homes.”
Even though the average home sale price in Massachusetts is the highest it’s been in the last 10 years, Lamacchia said there are bidding wars everywhere and single-family homes are “just flying off the shelves.”
“I’ve never seen bidding wars – I mean, you know, randomly here or there – but I’ve never seen bidding wars with consistency in the fall like I have this fall. It’s crazy,” Lamacchia said. “They’re everywhere.”
HousingWire caught up with real estate agents across the U.S. to ask what their markets look like now compared to the summer and what they think the next few months could hold. Across the different markets, the agents consistently reported bidding wars amid heightened demand for single-family homes, low inventory and an increase of buyers fleeing big cities.
Watch Fannie Mae’s Doug Duncan give his 2021 housing forecast at HousingWire Annual.
The demand might be a little less crazy now than during the summertime, but Lamacchia said it still remains significant, as more people are leaving Boston for more space.
Boston “feeds the rest of the state,” Lamacchia said, and the people in the city are selling their condos and moving to the suburbs.
“We have even seen people move to their vacation home, or move to their second home, so that their children could go to school,” Lamacchia said. “I know people who have either moved or they’re spending enough time with their second home that they’re sending kids to school there.”
Once COVID-19 caused much of the U.S. to shut down in March, Kaitlin Lovern, a Century 21 agent with Judge Fite Company in the Dallas/Fort Worth suburbs, said she expected the year to be done for. Lovern was actually on maternity leave at that time when open houses and contracts were paused.
“In March, you saw people draw back – we had some buyers terminate their contracts, we had some sellers pull listings out of health and safety – just really not knowing what this virus was all going to entail,” Lovern said. “Then I felt like at the end of May, you started to see that fog lift…I think one of the reasons that it has been so competitive is the emphasis on what a home is, has completely changed.”
Consumers working from home or schooling from home want more square footage since the home is more than just a home now, it’s a daycare, an office, a gym and a school. Lovern met with a pool installer recently who said that pool permits in Frisco, a Dallas suburb, have gone up 400%.
“What I’ve seen is this pent-up demand of people that need more square footage, that need a place to work out, need a place for their nannies to hang out with their kids while both the husband and wife are working from home,” Lovern said. “I think that’s kind of been the driving force, just the way we utilize our homes has changed so much due to COVID and being quarantined that people need more square footage. Their housing needs have changed. That, coupled with the all-time low-interest rates, it gives the buyer a lot more purchasing power.”
Lovern sees this demand across all tiers of home prices.
“I put on a listing at $230,000, one on $1.2 million, and I put one on at $530,000, and all of them had, I would say a minimum of about 20 showings in the first 24 hours,” Lovern said.
Bill Lublin with Century 21 Advantage Gold in the New Jersey and Philadelphia area is in a location where his brokerage is benefitting from the exodus from New York City.
Lublin’s location has always had people moving in from the city, but since the pandemic he said he’s seen more homebuyers looking for space.
The beginning of the year for Lublin’s business was great for about eight to nine weeks, then March 18 came along and Century 21 Advantage Gold had to close its doors for 10 weeks.
“It was like, sorry guys we were just kidding, and this is now going to be the year from hell,” Lublin said. “It feels like it was a decade ago even though it’s seven months — it could just as well have been seven years ago.”
As for a potential slowdown with the holidays quickly approaching, Lublin is “very iffy about that.”
“We have not stopped through the summer, there was no real pause in June, July and August, we were just guns-a-blazing going through,” Lublin said. “With pending being 50% up [at the end of September] from last year, I know my agents right now are out there writing a ton of offers. Listings are like gold.”
In Tampa, Florida, Devan Weisser with Century 21 LIST with BEGGINS said that right now, they’re being flooded with out-of-state buyers. Specifically, Weisser said she’s seeing buyers coming from cities like Boston, Atlanta, and Chicago and some coming from California.
Although Tampa has low inventory – which is nothing new – Weisser said there is a lot of new construction, so there should be more inventory coming up.
For the last five to 10 years, Weisser said her market has been growing at a positive pace. But when March came around, the city of Tampa shut down, and “it was a ghost town.” Now, she said she has never seen a year like this one.
“I was worried, the people I worked with were worried, we didn’t really know what to expect,” Weisser said. “In April we started getting more calls from out-of-state buyers and that was a very unexpected surprise, but it’s not a surprise to find people if you’re going to be working remotely who could still live here.”
Throughout COVID-19, real estate agents and home listing sites had to adapt to social distancing standards – by including virtual tours, FaceTime tours and more. Now, with the aid of Zoom and FaceTime, Weisser said that many are buying sight-unseen in Tampa.
“That’s just something that doesn’t typically happen,” Weisser said. “Maybe you’ll get an investor do that a few times a year, but this is COVID, so April, May, June, July, August, all the way to now, we have had a lot of sight-unseen properties being purchased.”
In Denver, Juan Sanchez said he thought the market would be slowing down at the beginning of the pandemic. The Century 21 Bear Facts president said that’s far from what happened. Not only has Bear Facts been very busy, but Sanchez said that the type of buyer coming in has changed.
Sanchez said the biggest population of buyers he’s seeing right now are singles who work in the tech industry, and noted that many buyers are seeking out basements in their potential home.
“They’ve been working this whole time and they’ve been at home, and they’re looking at bigger property or bigger homes with maybe a little more land,” Sanchez said. “So, they’re moving away from the downtown area and the suburbs are really getting busy.”
Although other cities picked up right where they left off when real estate restrictions were lifted in late spring and early summer, Sanchez said his market started picking up at the end of August. Normally, home-buying season has slowed down by that time and families are settled down just in time for school to start, but that’s not the case this year.
Sanchez believes that because of the aid of virtual tools, the typical homebuyer has changed the way they look for homes, making it possible to do it anytime, anywhere. Like Weisser, Sanchez said many are buying sight-unseen in Denver.
“I believe it’s gonna slow down at least a little bit during the holiday season, just because I think people have been waiting for that… it’s a time for family and love and hope and it kind of gives them that good feeling,” Sanchez said. “I think everybody’s just kind of waiting for that to happen and I think they’re going to take full advantage of that time. So, I believe it’s going to slow down a little bit, but I don’t think it’s going to slow down as much as it normally does.”