I am cautious about going on record about my predictions but this is what I think with the information that is available as of March 15, 2020. As things start to change and shift I will update clients and some of my strategies and predictions may have to shift too.
To me this is the group of people involved in real estate that is the most up in the air right now. The biggest question being to list now or wait until it blows over. My general process behind maximizing your Seller profits is to have as many potential buyers view your home which should lead to the most and the highest offers. Most of this depends on how severe and wide spread the quarantines become. If we get to a point where the President asks everyone to stay at home and transportation, etc halts. Then, yes I expect showings to relatively halt. But, if people are taking precautions and feel safe showing with their lysol wipes in hand then showings will continue. Luckily, you all know I LOVE technology so, getting exposure for a listing while people are at home and bored sounds right up my alley! Some listing strategies I would recommend shifting:
- I have marketing and materials drafted to allow Buyers to have confidence that the home has been cleaned appropriately to keep them healthy.
- Typically listings get cleaned before listing and then right before closing. I would recommend having a cleaning service visit more regularly. Less nervous Buyers is better for the Seller.
- The entry typically has booties and a request to remove shoes. I’ll be adding disinfecting wipes for as long as I have a supply of them.
- Traditionally we allow many showings at one time. I would recommend only having one showing in the home at a time. This should increase agent and Buyer comfort.
- I’ll perform virtual open houses through facebook live, touring potential Buyers and Buyer’s Agents through from the comfort of their own homes. Facebook live offers a platform for Buyers to ask questions and me to answer.
- Any way I can utilize technology to get your listing continued exposure will be taken into consideration.
What Is Supply and Demand Like Now?
The blue bar represents the total active homes we had in February vs. the red bar showing the amount of inventory we would need to offset demand and create a market in equilibrium. In February Metro Denver had 15.6% of the inventory required to offset demand. So, I think even if coronavirus creates a statistical blip in sales the Seller’s market will continue until number of listings can get closer to meeting Buyer demand.
What Is Appreciation Like Now?
February’s closed prices demonstrated similar changes as previous years in this cycle. The bulk of price appreciation is established annually between January through June
List Now or Wait?
Historically this is the time of the year when the most listings are on the market and Sellers are making the most profits. As soon as last weekend my Buyers were in 11 and 7 offer bidding wars. We’re used to seeing a busy Spring with March listings selling for about 100.2% of their listing price and about 7 days on market. This same quick pace continues through May and comes to a pretty fast eeeeeking halt felt across all price points in June. The last two years June 4th was the day but the 5 years before that July 4th was the day. We can never anticipate the day that Buyers slow down but let me tell you it feels like it’s overnight. That’s not to say you can’t sell your home June-December, you’re just not as likely to have a multiple offer situation and your list price vs sales price moves down ever so slightly from 100.3% and 7 days on market in May to 98.7% and 19 days on market in October. It is believed that this slow down happens for a couple reasons:
- If you’re a Buyer and have been in bidding wars since February, by June you’re worn out.
- If you have school age children you’d like them to be settled in their new home before the school year stars.
- Although Denver’s supply of homes has not met the demand in many years the months supply of inventory goes up to 2 months in July which feels like so many more options than the 1.4 months supply of homes the Buyers had to choose from in January-April. So, in general just less urgency.
So, the quarantine severity will impact if showings continue or stop and if it’s better to list now or later.
What Impact Will Easter Have?
We also have a religious holiday weekend coming up. Coloradans love to get outside! So your Buyer pool might be dying eggs with their family or they might be skiing, but they typically pause their housing search over Easter weekend. Historically 54% less offers are submitted on Easter weekend. This trend was exactly the same 2018 and 2019 so with the exception of coronavirus impacting it, I would suggest similar trends in 2020. So, not the best time to list if your plan is maximum exposure. But, if we’re all quarantined to our homes and Easter weekend is the first weekend out of our homes, your guess is as good as mine if people will be house hunting or doing whatever they missed doing during quarantine. Here’s the historical chart we’re used to seeing of the offer decline over Easter weekend compared to the following weekends.
What if We’re Quarantined to Home?
If everyone has to wait to list their home due to a forced quarantine for all, then I could see an extended Spring sales cycle where Buyers are forced to take a break and might be able to recoup from some exhausting bidding wars and return new to the market with the same excitement they had in February. Maybe adding, must be able to grow a garden in case of another quarantine (Ha ha. Too soon? too soon?)
What’s Happening in Buyer Purchase Power? Many Impacts Stock Market, Corona Virus Job Impacts, 2020 Election Year.
It all depends on which parts of their Buyer puzzle are steady and which are shaky. With the stock market being shaky I could see Buyers who were planning to utilize their stocks or retirement as leverage for their purchase could be heavily impacted. Buyers who are largely in the service industries or not able to work remotely could be severely impacted by loss of work, reduced pay stubs, and impact the savings they had wanted to put into purchasing a home. On average, I think the Buyer pool will remain strong but the Buyers may be coming from a more conservative financial position. What I find is that in an election year this financially conservative attitude typically surfaces around July when they feel overwhelmed by change and the political ads get extra aggressive. But, this year it might be stock market and election year oriented. With as many Buyers are out looking I expect the core Buyer pool to still be strong.
How Will Showings Be Impacted?
I think that vacant vs not vacant homes is important here. I could see owner occupied homes temporarily stopping showings while vacant homes continue. I also suspect that the number of open houses will lessen.
I am collecting data on total showings in Denver. I have the data from last week and know how many showings are standard for this time of the year. So, I’ll continue collecting the information and send my analysis out to you.
That’s all I have for now! Hopefully that was some great historical context mixed with realizing the market we are looking at right now is largely out of my control. But, I’m here to support you through it and help you make the best choices for you in this unusual time.
Enjoy the sunshine & stay healthy! Talk to you soon! – Megan Douglas