Looking to buy or sell a property during these unusual times? Real estate professionals are embracing technology to facilitate transactions through virtual tours and more.
When the COVID-19 crisis hit New York City and Long Island, Mary Macaluso found her real estate business in jeopardy. She decided to create a virtual tour of a property to reach potential buyers.
She recorded the tour with her smartphone, posting it on social media with low expectations. Surprisingly, within hours, she had three interested buyers, one of whom made an offer.
“I had been advising my clients to hold off,” she shares. “Now, I’m preparing for a second showing.”
Real estate activity has slowed significantly across many areas due to the pandemic. With most regions under strict stay-at-home orders, agents have had to cancel open houses and in-person viewings.
Challenging Season for Home Buying and Selling
Simultaneously, millions are facing job losses, putting financial stability in question. This uncertainty has cast a shadow over the spring buying and selling season, historically the busiest for home sales. Data from Zillow shows a 19% drop in new listings from March to early April, a stark contrast to the usual 50% increase. In early April, listings plummeted by 27.1%.
With no clarity on when social distancing measures will end and the economy will stabilize, many are hesitant to enter the market. Skylar Olsen, a senior economist at Zillow, notes, “Our understanding of the economy is evolving rapidly, and early unemployment stats are alarming, so it’s natural for some to hesitate about selling their homes.” However, transactions continue for those with urgent needs.
While navigating this unique landscape of buying or selling a home during the pandemic will be challenging, it remains feasible thanks to technology.
Virtual Tours as Alternatives to In-Person Viewings
With open houses banned in certain regions and sellers wary of allowing prospective buyers inside, agents are leveraging technology to showcase properties. Macaluso and others are not only recording virtual tours but also hosting live video walkthroughs. Many are transforming 360-degree images into immersive 3D experiences. In the last week of March, Zillow reported a staggering 408% increase in the creation of 3D tours compared to February's norms. Listings featuring 3D tours received 50% more views than those without.
“There’s a strong demand from buyers who feel frustrated by the current limitations,” says Macaluso. “Perhaps this is the new norm.” Virtual processes extend beyond showings, as appraisals and document signings are also being conducted online.
Mortgage Acquisition Needs Determination and Effort
While technology is facilitating real estate deals, it doesn't ensure a seamless experience for buyers and sellers. Besides property viewing restrictions, securing a mortgage may become more complicated. With unemployment surging, mortgage lenders are prioritizing assistance for struggling homeowners. Although mortgage rates are at historic lows, they are fluctuating, complicating the process of locking in a rate.
“While interest rates are favorable, the mortgage market faces challenges as lenders adapt to help homeowners in distress,” explains Danielle Hale, chief economist at Realtor.com. “Rates can vary significantly hour by hour. Securing a mortgage or refinancing will require patience and tenacity, but it’s not impossible.”
Despite the current uncertainty, buyers and sellers can take comfort in the fact that the real estate market was in a strong position prior to the pandemic. The economy's health and the growing millennial demographic contribute to a resilient housing market. “A large number of people are reaching first-time home buying milestones as they start families and seek homes,” Olsen remarks. “Life continues to progress, and housing is intimately linked to those changes.”
