Coronavirus Impact on Central Ohio Housing Market
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Image courtesy of Ryan Homes
According to the Top 20 Toughest Housing Markets, Columbus, OH is ranked 7th and Akron, OH is ranked 20th. While these may seem like rankings that are unenviable, houses in Central Ohio have been selling well since April. Homes in Central Ohio sold more quickly in April than in previous months. This seems unusual due to the Coronavirus outbreak at the time of the sales. These sales were seemingly odd for many Ohio realtors given that the ‘stay-at-home’ order presented many challenges with the closing process.
Despite the pandemic, realtors are still closing sales which goes to show the dedication within these employees in providing the best service for Ohioans. The Coronavirus has nonetheless still provided several challenges for the housing market, therefore this article will discuss:
- Statistics of sales from the past compared to the present
- The impact of Central Ohio in wake of changes to the housing market
- Virtual tours and less face-to-face contact at open houses
- Luxury real estate market impact vs. normal real estate market impact
- Central Ohio resiliency
Sales: Past, Present, and Future
How Do Central Ohio Sales Statistics Vary With Time?
Real estate sales statistics normally vary year to year. Some year’s sales and mortgage applications can increase or decrease due to typical seasonal patterns. Seasonality matters a great deal in real estate. You may be wondering what seasonality and seasonal patterns mean in regards to real estate. Seasonality means the time of year has a huge impact on buying patterns. For example, homes sell faster in the spring, higher inventory in the summer, the fall puts the realtor at the center of attention, and the winter brings serious buyers.
Keeping these seasonal patterns in mind, the Mortgage Bankers Association (MBA) Builder Application Survey (BAS) data for June of 2019 indicates that mortgage applications increased approximately 17.9 percent more than those of June of 2018. These applications decreased occurring in May of 2019 with a 14 percent decrease than the year before. In Columbus, Ohio, real estate sales again dropped to the lowest level nationally in decades with a 15.1 percent decrease in April of 2020. In the first full week of May of 2020, on a seasonal basis, the home buying demand was 5.5 percent higher than in April.
This decrease was directly linked to the Coronavirus pandemic that took full hold of the real estate market. While demands for homes in lower price ranges remained high, potential sellers were forced to stay put. This stay at home order put a major damper on sales. The number of houses on the market readily available for sale decreased in April 27% from the previous April.
Uncertainty is now the housing market’s greatest future risk. With America’s economy on lockdown, the persistence of the Coronavirus, and physical and mental health ailments on the rise, the future is more than uncertain. There are no simple answers. A few economists believe that America will be facing another Great Recession if the economy is not revived soon. The country’s unemployment rates are at record highs and could have a sway over the housing market. With that being said, real estate agents are still able to find buyers that are adaptable and sellers that are still closing deals. The future is uncertain and the pandemic is teaching everybody that we need to adjust and learn new ways to transact in the real estate business.
Impactful or Helpful?
Central Ohio is Making House Hunting Readily Available From the Couch
Welcome to the era of selling a home in the era of the Coronavirus. With anxieties up about contracting the virus by breaking the ‘6-feet-apart’ rule, house hunting has become almost completely online. With the stay at home order closing all businesses that are not considered life sustaining, real estate agents were left jobless. But, this does not mean that everyday people are not in dire need of a home. Many buyers continued to look online for houses and quickly became owners without setting a foot in their new home. These buyers had a variety of reasons for needing to sell and buy a home quickly, even during a pandemic. These reasons range from chronic medical conditions to a growing family.
Some individuals handled everything virtually. These individuals were unable to receive virtual tours and therefore only saw pictures of the properties they were interested in. Virtual documents are then sent for signing and notarization. This process is long seeing that title offices and banks were unable to operate properly.
Staging a house and allowing open houses are key components in helping buyers associate a property with their future home. But, staging can come with many expenses and requires a great deal of investment. Virtual reality can be helpful in that realtors can market staged properties with less investment than an open house. 3D real estate tours can be a helpful way to allow buyers to look over the properties for sale that they are interested in.
Virtual Tours and Limited Face-To-Face Contact
Will Virtual Tours Become the New Reality?
Home buyers and sellers will find a way to sell and buy houses. This way might look a little different when compared to the normal open houses. Buyers and sellers are trying to limit their exposure to the virus by opting to do virtual tours. In the housing market, content creators for real estate agents are typically asked to gather photos of the properties. With the Coronavirus looming overhead, these digital media specialists are being asked to purchase more content such as software that allows a 3D multidirectional spin of the property a buyer is interested in.
While these virtual tours are nowhere close to an open house, this allows buyers who are concerned about the virus to make an informed decision about whether to go out and see the property. As technology improves, virtual reality has become another option realtors can use to entice their clients in these hard times. VR adds an additional level of content that clients can experience through a compatible mobile device such as an iPhone or Android when paired with a VR headset. These types of tours, VR and 3D, take cameras and strategically place cameras inside and outside of a property which can transform the client’s view of buying and selling houses.
Real estate is a game of communication and contact. You can only go so far with virtual tours, but face-to-face communication leads to exposure of many germs. Touching light switches, turning door knobs, and shaking hands can directly pass the virus to multiple people at once. Due to this fact, real estate agents have come up with a few ways to adopt new normal practices for safety. Some of these practices include:
- Carrying disinfectant wipes
- Wearing gloves and masks
- Wiping down light switches, doorknobs, etc.
Safety of the buyer or seller is the number one concern for all real estate agents. Nobody should be made to feel uncomfortable but landing on the side of caution is better than worrying about exposure to the virus.
Luxury Living vs. Normal Living
How the Luxury Real Estate Market is Being Most Affected
With housing markets being hit hard by the Coronavirus, the world of luxury real estate continues forward. Impacts are starting to be felt, but with the reopening of many states, agents are adapting to changing client behavior as well as government regulations. According to a report by the National Association of Realtors, 25% of buyers have made several adjustments to their “terms of engagement” in early March, the start of the lockdowns. The pandemic and lockdowns have slowed the momentum of sales seen in previous years, with virus-fighting measures disrupting the momentum.
With the promise of a job being very uncertain in the future, the housing market will feel pain, especially the luxury market. Luxury buyers invest a lot of money into stocks, and as recent financial hardships have occurred, the stock market has taken a huge hit. This has caused luxury buyers to put the brakes on house hunting for a while.
Popular destinations for retirees, have experienced slowdowns in closing as well. Older Americans, who are very vulnerable to the virus, are increasingly very reluctant to visit their forever homes. Most of these retirees have homes already so the need for a forever vacation home is not urgent and can most likely be put off until the virus has passed.
With homes costing in the upper millions, many would have seen closing in less than 30 days. This number has gone up and more extensions and cancellations are being seen. Mortgages are also taking longer to process in the luxury market.
How is the Normal Housing Market Being Affected?
As seen in the Columbus Ohio Housing Report, the median price of a home sold in Central Ohio is $213,000 which is up 8.1 percent from 2019. The closing price sale price was $234,414 which again was up 6.6 percent from 2019.
Ohio relies on the housing market from an economic standpoint. A quote from Andy Mills, the 2020 President of Columbus Realtors, reads:
- “One home sale puts $55,500 back into the economy in Ohio. So, we are counting on the real estate industry to help get Ohioans back on their feet as we start to slowly re-open.”
Caption. Image courtesy of Cleveland.com
Will Central Ohio’s Real Estate Market Bounce Back?
With the stay-at-home restrictions being eased nationwide, Ohio is seeing a bounceback. This bounceback has been seen mostly in the month of May with an increase of the home buying demand. This bounceback is very closely linked to record-low mortgage rates in light of the virus, virtual tours and home shopping, and now the ease of local-lockdown rules. There is also a continuation of rising purchase applications.
The Coronavirus has definitely slowed buyer-traffic and many sellers have delisted their properties due to uncertainty of the future.
There is also some concern coming from real estate agents. These concerns are about the appraisals and closings that are normally done in person. Title companies have been put on pause since some states do not allow online notarization.
Given the seasonal changes that bring about an increase of housing demands, some are not convinced that there will be a major collapse in the housing market. Some believe that the housing market will be on the up and up for the foreseeable future. HER, REALTORS® believe in helping their clients every step of the way even in the wake of a pandemic. Their main goal is to deliver exceptional customer service and make a difference in their clients’ lives.
These realtors believe that successful real estate transactions begin with healthy relationships with the clients. If you or someone you know is looking to buy or sell a house in the Central Ohio area, make sure to contact HER. They will help you figure out the important decision of either buying or selling your home. If you need more convincing to pick HER, REALTORS®, they are not only dedicated to their clients but also dedicated to giving back to their community. A few of the charities they are involved with include:
- Habitat for Humanity
- Gracehaven Youth for Christ
- The Homeless Families Foundation
- Stuff the Backpack
Overall, the housing market has been impacted by the virus but is resilient. A virus will not stop the selling and buying of homes. There are many unique ways that realtors are still able to show homes to their clients. The housing market will survive and HER, REALTORS® is a great option to meet your housing needs.