Coronavirus: Real estate brokers brace for uncertainty in spring market – Lohud

How do you sell a home in the epicenter of a pandemic?

The outbreak of coronavirus has left many in the real estate industry asking the key question as the normally robust spring market kicks into gear. 

Low interest rates, a decline in new home listings and sellers’ willingness to come down on price have allowed the market to pick up some steam in recent months.

But concerns over coronavirus are causing people to limit their exposure to large gatherings and strangers, such as open houses, even amid favorable market conditions for buyers. 

Real estate experts face unprecedented challenges as New York state declared a state of emergency last week and the National Guard deployed to a one-mile containment area in New Rochelle due to coronavirus.

Yet the experts so far maintain that it’s too early to tell how these events will affect people’s ability to sell their homes in the spring market.

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Those interviewed by The Journal News/lohud say the outbreak came to Westchester County during a bull run for the single-family real estate market. And while it is too soon to tell the true effect of the virus, sellers and buyers are already taking safety measures.

“When consumers process uncertainty — just like they did with the [state and local tax deduction cap] — is (when) we see a slowdown in activity,” said Jonathan Miller, of real estate appraisal firm Miller Samuel. “The problem is that you have consumers that are motivated by the drop in rates and then you have others that want to wait until they’re comfortable. So it’s not a sure thing.

“What we’re seeing in the city … is a slowdown in inventory coming to the market,” he said.

As a result of coronavirus, Miller said the local real estate market may see a slowdown similar to 2017 when the Tax Cuts and Jobs Act limited state and local tax deductions to $10,000.

But the CEO of Miller Samuel said coronavirus and the low interest rates may prove beneficial to buyers this year.

Sellers in Westchester, he said, have had to come down on pricing in recent years to meet the new market expectations. And the potential reduction in inventory due to the virus, coupled with favorable interest rates, may push sellers already in the market to consider further discounts.

Leah Caro of Bronxville-based brokerage firm Park Sterling Realty said new listings have slowed in the county, but the coronavirus frenzy has been offset by an early start to the spring market this year.

“Normally, we see the uptick in the listing inventory beginning in February but really peaking in March and April, which we still may see,” Caro told The Journal News/lohud. “But people weren’t waiting in the wings to bring their properties on.

“We have had one seller who was scheduled to bring her home onto the market next week push that back because of her concern about corona,” Caro added. “She’s planning to sell, but she just wants a couple more weeks to see where this goes because she doesn’t love the idea of having multiple strangers in her property. And she does fit one of the demographics of being more vulnerable.”

New Rochelle a different tale

The single-family market in New Rochelle tells a different story. 

Michele Silverman Bedell of Silversons Realty said she’s hopeful the containment zone will not be active after March 25.

Silverman, the seller’s agent for a 2,300-square-foot home within the containment zone, says her listing at 15 Ranger Place is still drawing potential buyers.

However, concerns over coronavirus have led her to cancel an open house for the property this Sunday.

According to the Hudson Gateway Association of Realtors, five homes within the containment zone are still planning to host open houses this weekend.  

Kate Mercado, a resident of New Rochelle and a broker for Julia B. Fee Sotheby’s International Realty, said the city’s single-family market is experiencing a drop in casual buyers while seasoned buyers see an opportunity.

“We’re seeing people who know that they want to be in New Rochelle,” she said. “It could be a great time for them to sort of take advantage of other people who may not be coming out to explore right now if they’re nervous about, you know, the virus being sort of centered near us.”

The New Rochelle market experienced a drop in median sales price, new listings and closed sales in 2019. The market saw a reduction in new listings of 12.5% over 2018, while median sales price decreased 1.5% to $675,000, according to HGAR.

The association of realtors reported condominiums and co-ops in New Rochelle saw a growth in median sales price by 21.7% and 4.6%, respectively. The median sales price for condominiums was $522,000 while the median sales price for co-ops in the city was $160,000. 

Tailwinds for mortgage banking

The Federal Reserve’s cut of interest rates last week is expected to prop up the local real estate market despite concerns of coronavirus. Experts interviewed by The Journal News/lohud said the cut to interest rates will help drive some traffic even while sellers and buyers are wary of open houses.

According to the Mortgage Bankers Association, mortgage applications increased to the highest level since April 2009 last week.

The association said it expects the cut in interest rates to increase overall mortgage and refinances this year to $2.61 trillion — an increase of 20.3% over total originations in 2019.

“Market uncertainty around the coronavirus led to a considerable drop in U.S. Treasury rates last week, causing the 30-year fixed rate to fall and match its December 2012 survey low of 3.47%,” Joel Kan, MBA’s VP of Economic and Industry Forecasting said. “Prospective buyers continue to be encouraged by improving housing inventory levels in some markets and very low rates.” 

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