COVID-19 has made the Triangle’s real estate market even more of a sellers’ market
Jennifer Coleman, a real estate agent for Coldwell Banker Advantage in Cary, was honest with people coming to her for advice about how to navigate the real estate market during the COVID-19 pandemic.
“I have never sold a house in a pandemic, so I don’t know what advice to tell you,” she remembers telling several potential sellers who came to her.
But a couple months into actually working in the COVID-19 environment, she and other Triangle real estate agents have been surprised by how much activity there has been. Thanks to technology like Zoom and 3D tours — as well as plummeting mortgage rates — home sales have not dropped as much as Coleman thought they would.
In fact, from January through April, closed sales are up 6.9% compared to last year, according to Triangle Multiple Listing Services numbers.
For the month of April, however, when the coronavirus really stopped most showings, sales did drop 6.4% compared to the same month last year.
“Overall, we are surprised by how many homes we have seen sold,” Coleman said. “And when homes do come on the market, they sell very quickly.”
She’s now telling sellers that it is actually a good time to sell their home, if they are in the position to do so. “We can’t keep a home listed,” she said. “We had two homes go on the market in the last week and they went under contract in three or four days.”
Despite demand falling from the effects of the coronavirus, the number of homes for sale has dropped even more. The number of new home listings in April fell 23.6%, according to Triangle MLS.
Homes that are on the market are getting more eyeballs and many times multiple offers, especially if they are priced below $400,000.
For that reason, home prices in the Triangle have continued their years-long upward trend. The median sales price in April increased 3.6% to $290,000 compared to last year.
Sharon Webb, of Webb Realty at Coldwell Banker Advantage, said that after a slowdown in March, she has been nearly as busy as she usually is this time of year.
“I think the interest rates are driving the continued interest” in buying homes, Webb said. In March, the U.S. Federal Reserve cut interest rates to nearly zero in response to the coronavirus slowdown.
At the moment, a 30-year fixed-rate mortgage sits at 3.26%, according to Freddie Mac. That’s nearly a percentage point drop from a year ago, when that rate was closer to 4.1%.
Webb said she doesn’t expect interest rates to increase much in the coming months.
“We get asked, ‘Should we buy now or wait?’” Webb said. “...I don’t think prices are going down.”
Stacey Anfindsen, a Cary-based appraiser with Birch Appraisal, said he expects demand and inventory to remain low going into the summer. Fannie Mae estimated earlier this year that home sales will fall by nearly 15% in 2020.
In April, there was a 2.1 month supply of homes in the Triangle, a measurement that estimates how long it would take to sell all homes currently on the market.
“Demand is going to be lower, but it is going to track the level of inventory,” Anfindsen said. “It is not going to five or six months of inventory.” (An inventory level below six months usually indicates that it is a sellers’ market.)
“A majority of U.S. citizens are scared more than they ever have been in their lives,” he added. “I don’t think [Anthony] Fauci or anyone else saying everything is OK is going to get people to jump back in right away.”
One potential concern, Anfindsen noted, is that many of the people laid off or furloughed right now view their situation as temporary. Whether that is still the case a few months from now remains to be seen, he said.
The people buying right now are “making the bet that their community will be better, home prices will grow and they won’t be losing money from their paycheck” in the coming months and years, he said.
Another factor that people are watching is whether people living in cities most affected by the coronavirus will migrate to less dense metro areas like the Triangle. For years, the real estate market here has been buoyed by workers moving here to take jobs at universities, in the medical field or at one of the Triangle’s growing tech companies.
Coleman said her last three closings were from people relocating to the Triangle, with some doing the purchase completely virtually.
“The next six to 12 months, we are going to see a lot of” people relocating, Webb believes. “People just don’t want to be on top of all these other people right now.”
This story was produced with financial support from a coalition of partners led by Innovate Raleigh as part of an independent journalism fellowship program. The N&O maintains full editorial control of the work. Learn more; go to bit.ly/newsinnovate
This story was originally published May 13, 2020 at 2:43 PM with the headline "COVID-19 has made the Triangle’s real estate market even more of a sellers’ market."
