CLEVELAND, Ohio — The novel coronavirus and resulting economic fallout is sure to have some effect on the local housing market, but, with rapidly changing conditions, it’s unclear just what they will be.
As COVID-19 testing capabilities ramp up, more and more cases are being confirmed across the U.S, prompting precautionary public health responses such as Ohio’s ban on mass gatherings and closure of schools. Meanwhile, the stock market has experienced massive fluctuations, earlier this week experiencing its biggest crash since 1987 before rallying Friday on the declaration of a national state of emergency. Mortgage rates rose this week after dropping to their lowest levels on record as investors reacted to the pandemic.
Locally, real-estate professionals say the effects on the housing market have not yet been fully seen, partly because the new reality is just now setting in for many Ohioans. The latest home sale data, from January, pointed to a strong market, but much has changed since then and experts said the typically busy spring season is likely to see some impact.
“I see it just starting to brew here in Cleveland,” said Judy Gorbett Darwal, owner of a Re/Max Trinity brokerage in Brecksville and immediate past president of the Akron Cleveland Association of Realtors.
The National Association of Realtors reported this week that, because of coronavirus, nearly 1 in 4 home sellers nationwide are changing how their home is shown to potential buyers.
Sellers are in some cases halting open houses, requiring prospective buyers to wash their hands or use hand sanitizer, or asking buyers to remove their shoes, according to an NAR survey of 2,518 members between March 9 and 10. (NAR oversampled members in Washington state and California because of larger known outbreaks there.)
Locally, real-estate professionals say they are more concerned about reactions from sellers than from buyers, although they have not yet seen many changes.
Howard Hanna Real Estate Services, for example, provided data indicating that home showings this week have been on pace with, or on some days better than, showings from the last two weeks.
Anecdotally, Darwal said she has heard about anxiety among local sellers that buyers may be holding off on purchasing decisions, prompting concerns about keeping homes on the market so long that they lose value.
“We’re seeing this has carried more into seller psychology,” said Joe Rath, Ohio market manager for Redfin. “Sellers are a little bit more worried about whether this is the right timing for them,” in addition to concerns about letting people into their homes.
Real-estate brokerages are adapting by promoting tools such as virtual or video tours of homes to limit in-person showings, although some real-estate professionals acknowledged that buyers may still want to visit a home before making such a significant purchase.
There is some concern that sellers holding off on listing their homes will exacerbate a long-running challenge: There are not enough homes for sale to meet demand from buyers.
Nationally, this does not yet appear to be the reality. Just 3% of respondents to NAR’s survey said homes were removed from the market due to coronavirus.
But it’s something that agents will be watching closely.
“We’ve had challenges with inventory for quite some time,” said Hoby Hanna, president of Howard Hanna Real Estate Services. “This may present a new challenge: If somebody takes advantage of refinancing their house at these low rates, they may take themselves out of the market of even thinking of selling.”
And if the economic consequences of the pandemic lead to a recession, growth in badly needed new-home construction may dampen, he noted.
Buyers still interested
At this point, real-estate professionals don’t seem to believe coronavirus will stymie interest from buyers.
About 16% of respondents to the NAR survey said coronavirus has led to decreased or significantly decreased interest from buyers, but 78% said they had not seen any change in buyer interest. And lower mortgage rates are a more important factor to home buyers than what’s happening with the stock market, according to NAR data.
Homeowners and prospective buyers responded last week to the plunge in mortgage rates caused by investor panic over coronavirus. Mortgage refinance applications soared 79% compared with the week prior, while applications for home purchase loans increased 6%, according to the latest Mortgage Banker Association data. Mortgage rates have since jumped back up, with the 30-year fixed rate back up to 3.65% this week.
Still, even amid uncertainty about how sellers will react or what the longer-term economic effects of the pandemic will be, local real-estate professionals don’t expect a housing market downturn, or for buyers to back down.
“I don’t think that buyer demand is going to go away,” Hanna said.
But, some sources noted, that’s just what they think today. With so much volatility, and so many unknowns, the housing market of tomorrow could be much different than the housing market today.
Read more coronavirus coverage:
Real estate pause could hit city budget hard – Toronto Sun
With the ongoing coronavirus outbreak hitting the pause button on Toronto real estate sales, there is concern the crisis may deal a serious blow to the city’s bottom line.
Approved earlier this year, Toronto’s $13.6-billion 2020 budget includes an expected $800 million in revenue from the Municipal Land Transfer Tax (MLTT) — accounting for 7% of the city’s operating funding.
The budget already included a $77-million hole expected to be filled by federal funding commitments to pay for the housing of refugees — commitments made long before coronavirus made worldwide headlines and paralyzed economies across the globe.
Relying on MLTT can be a risky venture for cities — in 2018 lower-than-expected real estate numbers produced a $84.5 million hole in the city’s budget, according to briefing notes.
With land sales in the city frozen due to COVID-19, MLTT revenue is expected to fall to levels far below that.
While requests to the city for year-to-date MLTT revenue numbers went unreturned, a statement from the Mayor’s office said the impact of the outbreak on city coffers won’t be known for some time.
“Mayor Tory and City of Toronto staff are working to make sure we do everything possible as a municipal government to help Toronto residents and businesses during the COVID-19 pandemic and after the crisis is over,” read an emailed statement.
“We know there will be an economic and financial impact on the City itself and our finance officials are working right now to understand how big that impact will be over the coming months.”
The TTC alone, said the statement, is losing about $20-million per week in revenue — one of many financial hits the emergency is dealing upon Toronto.
The TTC alone is losing revenue in the amount of roughly $20 million a week and that is just one of the financial hits the City is experiencing as a result of the ongoing emergency.
“Right now, our focus is on stopping the spread of COVID-19 while continuing to deliver essential and critical services and working with the other governments to rebuild the economy as quickly as possible.”
Video: Homeless man hosed down in front of Gastown commercial real estate office – Straight.com
Some Vancouver residents have expressed outrage over social media in connection with how a homeless person was treated in Gastown.
Video on social media shows a person spraying a garden hose to remove the man from the front door of 305 Gore Street.
The real estate office is part of an 11-storey mixed-use condo complex called The Edge, which was developed in 1999 at 289 Alexander Street.
One of those who tweeted about the incident was Harsha Walia, executive director of the B.C. Civil Liberties Association.
She described the use of the hose as “despicable anti-homeless violence”.
(Warning: the video includes swearing.)
It’s increasingly difficult for the homeless to find a place to rest in Vancouver as a result of the closure of libraries and most community centres, as well as the conversion of fast-food outlets and other restaurants to takeout joints.
For more on that, check out the tweets below by homeless resident and Straight contributor Stanley Q. Woodvine.
Real estate publisher lets 70 go, blames coronavirus impact – Toronto Star
Key Media, the Toronto-based publisher of trade magazines Canadian Mortgage Professional and Canadian Real Estate Wealth, has cut more than a third of its global workforce amidst the economic fallout from the COVID-19 pandemic.
This week, the publishing and conference company issued severance notices to 70 people, in offices as widespread as Canada, the U.S., U.K., Singapore and Australia.
Before the wave of cuts, the company employed almost 200 people in eight offices
One employee who received a severance notice said they’d been told by a Key executive that the biggest reason for the cuts was that the company’s conference business had dried up almost all at once, because of the global COVID-19 pandemic.
“The current economic climate has had a huge effect on the company’s revenues, and we have forecast a significant negative impact on the company’s bottom line for 2020. This means that unfortunately, we are no longer able to continue your employment,” the severance notice stated.
Email and Skype messages to company CEO Mike Shipley, who lives in Antigua, weren’t immediately returned.
Key Media publishes 130 trade magazines devoted to real estate, mortgages and insurance. It also runs 70 annual conferences and trade shows.
Earlier this week, Saltwire Media, Atlantic Canada’s largest newspaper chain, laid of 40 per cent of its staff and shut down all of its weekly papers for at least 12 weeks, citing a plunge in advertising in the wake of the COVID-19 pandemic.
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