Navigating the Real Estate Market Amongst the Pandemic

With uncertainty looming across all aspects of both our nation’s economy and daily lives, it is only natural to wonder how our local housing market will be affected. After all, your home is one of your largest – if not THE largest investment in your life. Because of this, we have received many inquiries over the last month about if it’s a good time to buy, sell, or wait. We wish there were a good answer to this question, but as this is a complex situation that is affecting all corners of the economy, there is no simple answer. This is also uncharted territory for the Kansas City market. Although there have been similar pandemic situations to hit other areas of the globe in the recent past, this is a first for our modern-era city.


Before we cover any potential forecasting, we’d like to cover the current regulations regarding our industry in the KC area. Yes, real estate business in Kansas City has been considered “essential” HOWEVER, when it comes to the stay-at-home mandate, the real estate industry is not exempt from this prohibition except as needed to maintain “continuity of operation,” including housing construction, the closing of properties under contract or in assisting in the procurement of adequate shelter for those in immediate need. Obviously “immediate need” is a bit subjective and because there are over 10,000 licensed real estate agents in the KC metro, there are a lot of different messages being conveyed. Whatever message you are receiving, we hope that it is based on the overall well being of the parties involved and not because a sale is trying to be made. Because of the widely differing messages out there, we’d like to tell you how we will be moving forward as a company. We take this virus and the efforts in prevention very seriously and are taking every necessary precaution when showing and listing homes. We are presenting the information to our clients and letting each family decide if their real estate need is an immediate need. If they decide it is, we are 100% available for both buyers and sellers and can go over all of the new guidelines and standards for showing homes. We are also providing 360-degree virtual tours for all listings moving forward to help buyers get more information online before committing to come to the house in person. When showing buyers we are limiting touch contact with house surfaces, using gloves and hand sanitizer and showings are limited to around 15 minutes with 45-minute gaps in between.


Now onto the bigger picture question – how will this affect the real estate market as a whole and the value of my home? Well, the answer is that because this is uncharted territory and because there are so many moving parts to this economic puzzle, we can’t say for sure what the long-term results will look like. What we know is that the number of showings in the metro is decreasing and that the latter half of March compared to the same time period of 2019, listings are down 27%. What is good about this is that we are seeing an OVERALL slow down (which we should) because of the stay-at-home order. A Zillow study looked at the 2003 SARS outbreak in Hong Kong and real-time data in China as the current outbreak slows – the volume of transactions dropped dramatically during those periods, but home prices typically stayed the same because both sellers and buyers were pulling out of the market at the same time. When both buyers and sellers become fearful, they tend to pull back from the market. In contrast, in the 2008 housing crash, buyers pulled back in droves while sellers were still eager to sell. Because of the mutual apprehension in this market, we have no reason to expect a change in values.
As far as immediate activity that we are seeing, it is still comparable to the pre-COVID market filled with multiple offers and healthy showings, it is all just taking place on a reduced scale compared to what we would usually expect to see in our typical spring market. January started out with extremely high showing activity and showing activity is the best indicator of future sales. We have no reason to doubt that once the stay at home orders are lifted that we will see showings shoot up once again. All that being said, future market values still rely on the future of lending and the avoidance of mass foreclosures alongside countless other variables. We will continue to update you on the status of the market and we hope that you see us as your consistent real estate resource. We are always available by phone, text, email or messages on social media. In the meantime, we hope you are enjoying your quarantine in some way, shape, or form!