As the world is feeling the COVID-19 impact, it seems no industry is immune. Real Estate, above anything, is getting hit with the "worry" impact more than a physical industry disruption. Buyers nervous about job security are nervous about future mortgage payments. Sellers are nervous to let viewers inside their homes. Investors are nervous about future property values. Nervous, nervous, nervous.
But for those in search of the silver lining during these trying times, here's some good news: despite the Illinois mandatory shut down, the real estate industry is keeping up at a steady pace so far — and we have facts to prove it. For all those who need some industry encouragement, we've put together a list of positive local real estate news for our community.
1.) Real Estate related services qualify as essential.
Governor Pritzker's announcement on March 20 releasing Illinois' "Shelter in Place" order has shut down most businesses to minimal operations. What's good to know is the "Essential Business" category, allowed to continue operations, is quite generous - and includes all real estate services, title companies, legal services, banks, and even moving companies. Realtor® Associations do not have the authority to prohibit home showings. While we've encouraged our agents to make use of virtual tools as much as possible, it's comforting to know that our services don't require a mandatory halt. Rest assured, clients and professionals, that most of your transactions and closings should continue to move forward if all parties want them to.
2.) Mortgage rates are low.
For a bit of more good news, the 30-year fixed mortgage rate dropped to 3.50% last week, after a fairly volatile few weeks. The Fed also announced it's unlimited bond-buying plan speficifally due to the coronavirus. Lenders and buyers alike are glad to hear this, as the industry is feeling a lot more stability during what seem like the most unstable times in history. Mortgage-seeking buyers who are second guessing their home search should keep in mind that in the long run, your mortgage rate could have as much of an impact as your purchase price. A fixed low rate lasts as long as you keep it - so if you're looking to move, locking in a low rate today will have a significant long-term impact. To see if buying right now is right for you, ask our professionals do to some comparison math for you!
3.) Virtual reality is making things a lot easier.
Hello, live videos! What seemed like a fun tool when it first rolled out is now a major life-saver for industries like real estate. To maximize social distancing efforts but still help our clients, agents are turning to common live-stream video tools for real-time virtual property tours, discussions and the like. E-sign programs make everything distant and paperless - meaning you could literally get your dream home under contract from the comfort of your couch. Agents are also thriving with these tools, as brokerages are offering live-stream training and more. All that to say - we keep going while staying safe.
4.) Inventory is still low.
According to the Chicago Association of Realtor®'s most recent market outlook, Chicago's property inventory is down 9.2% from the most recent data point taken last year at this time. Low inventory tends to go hand in hand with stable property values, since there isn't much room to be picky. And our inventory is not an overnight matter - it's definitly something the Chicago market has been seeing over many, many months before now (due to the generational trend in choosing to move). In fact, stats are showing that median sale prices went up 6.4% in a year-over-year comparison. Though we're watching to see how the data changes due to the worried atmosphere, we know that low inventory is a trend that has been with us and stayed long before the virus news hit the word.
5.) Buyer activity is (still) healthy.
The Chicago Association of Realtors® reports a 2.8% decrease in list time, and a 2.3% increase in properties sold compared to the most recent data last year. Nationwide ShowingTime Showing Index®, with most recent data from January, showed a 20.2% year-over-year increase in showings across the country. Our Midwest Region specifically went up 15.7%. Local MLS data is showing an increase of 22.5% in under contract properties between January and February. Of course, the COVID-19 outbreak escalated so quickly in recent weeks that we don't have the data to keep up with it day to day; but the numbers so far are encouraging enough to not lose heart.
For those who need to move and are afraid, safety is your first priorty - but weigh your options in the midst of it. If your income stream has stayed steady during this time, if you take advantage of virtual tools and low rates, it may not be worth putting everything on hold. But in the end, whatever makes our clients the most comfortable is what makes us the most happy - and that's what helps everyone stay postive together.
If you need some advice, don't hesitate to ask an arhome agent. Times are strange, but we're still at your service.
Stay safe and healthy, everyone!
Author: Joanna Sokolowski Sources: Chicago Association of Realtors®, Marketwatch.com, MRED LLC Infosparks