By Lorie Hailey
(Editor’s note: This is part eight in our series about how Kentucky businesses are responding to the challenges presented by COVID-19. See the full report.)
Although it seems longer, it has only been about four weeks since our normal lives were essentially put on hold by COVID-19. Kentuckians are staying “healthy at home” and practicing social distancing, fighting the spread of the especially contagious respiratory illness and potentially saving the lives of as many as 11,000 fellow residents, according to Gov. Andy Beshear.
Many businesses are temporarily closed, and tens of thousands of Kentuckians are unemployed, but glimpses of normal still abound. People continue to order takeout from restaurants, purchase goods from online retailers and some are making larger investments – in residential real estate.
In January and February, closings on Kentucky residential real estate were up about 9%, according to Kentucky Realtors, the state’s real estate association. Rising median prices meant larger transactions, though, and overall sales volume had an even more notable rise. Sales volume in February reached $667.5 million, besting last year’s figure by over 15%, the association said. Nationwide, more than 5 million homes were sold in February.
But the February figures do not reflect the significant hit the economy is taking because of the coronavirus, said Lawrence Yun, chief economist for the National Association of Realtors.
“These figures show that housing was on a positive trajectory, but the coronavirus has undoubtedly slowed buyer traffic and it is difficult to predict what short-term effects the pandemic will have on future sales,” Yun said.
Though it has started to slow, the real estate market still had a robust March in most of Kentucky.
In the bluegrass region, March sales were strong, said Greg Buchanan, 2020 president of the Lexington-Bluegrass Association of Realtors (LBAR), with just “slightly fewer” transactions than March 2019. LBAR’s March 2020 statistics will not be available until later this month.
Listings decline began before COVID hit
There are signs of decline, however. For the year, listings are down around 6%, Buchanan said, but this was a trend before the pandemic.
“We’re starting to see a few less homes go under contract as we look at the weekly data,” Buchanan said. “Showing data through March and now into April would indicate that buyers and sellers are adjusting to the ‘new normal,’ as we have started to see a slight uptick in activity recently. Regardless of the data, it’s way too soon to draw any conclusions. Anecdotally, realtors across the region are still seeing a lot of interest from buyers and sellers alike.”
In the Greater Louisville area, sales were up from February to March, said Kathryn Sotelo, president of the Greater Louisville Association of Realtors (GLAR), from 1,112 single-family residences and condos sold in February to 1,293 in March.
“March 2019 sales were 1,382, so we do see a bit of a slowdown when comparing this March to last March,” Sotelo said. “People are still putting homes on the market, although we are seeing fewer listings than March 2019. Last March, there were 2,128 new listings, and this March we saw 1,892, a decline of 11%.”
It’s a similar story in Northern Kentucky, according to preliminary data from the Northern Kentucky Association of Realtors (NKAR).
“We had 722 new listings in March, which is up 143 over February,” said Mike Spicer, NKAR president. “We’ve had 471 solds reported so far, which is up 10 from February. The average and median price are both up as well, and days on market are down by two from February.”
Real estate and affiliated services are considered life-sustaining, or essential, by the federal government, so real estate agents are still on the job, but social distancing guidelines have had an impact on how real estate agents conduct their business, LBAR’s Buchanan said.
Business becoming ever more digital
“Realtors are working from home as much as possible and limiting in-person activities to the absolute minimum. Fortunately, with today’s technology, they can deliver most of their services from a home office rather than in the field,” he said. “They are utilizing digital platforms to send documents to clients and digital signatures for contracts. They are conducting video meetings and digital presentations to clients with programs like Zoom and Facetime. Some brokerages and agents are investing in 3D imaging and virtual reality where buyers can walk through a house and see all the details without physically touring the home.”
Agents must take extra precautions to keep themselves, buyers, sellers and others safe, NKAR’s Spicer said.
Each agent and brokerage have had to make decisions about the safest and most effective way to serve their clients’ needs, said Sotelo of GLAR.
“There is not a one answer fits all in this endeavor and each agent and brokerage have had to make this decision on a day-to-day basis, taking into consideration the ever-changing landscape this pandemic has caused,” she said.
Because their jobs usually require showing potential buyers around homes that are for sale, real estate agents have had to get creative to come up with ways to do things more safely during the COVID-19 crisis. Many are conducting buyer consultations via video conferencing apps such as Facetime or Zoom.
“We are all experiencing something we have never experienced before,” Spicer said. “Our members are here to assist buyers and sellers navigate this uncharted territory.”
Buchanan, Sotelo and Spicer shared more about how real estate agents are adapting to a new normal for The Lane Report’s Making It Work series.
TLR: Can real estate agents still show homes in person?
Greg Buchanan, LBAR: Yes, realtors can still show homes in person, but only when necessary and they must take precautions. Traditional open houses, however, have been discouraged. Realtors are recommending that sellers prepare their homes for a showing by turning on every light switch and open every door (bedrooms, closets, pantries, etc.) so the buyer can walk through the home without touching anything. As an added precaution, many realtors have hand sanitizer, disinfecting wipes and shoe covers available for anyone viewing a property. Driving separately from clients and asking buyers not to bring unnecessary people to showings is now a standard practice. And there is tremendous growth of virtual open houses and other technologies that allow virtual showings.
Kathryn Sotelo, GLAR: Realtors can show in person as long as the seller allows it and the agent/buyer meet the requirements set forth by the CDC and they wear gloves, etc. There are some sellers who are not comfortable having their home shown at this time, and have had their agent create a virtual tour that may be sent to prospective buyers for viewing. If sellers are allowing for their homes to be viewed, their realtors are not allowing overlapping of home showings at this time. Prior to the pandemic, it was not uncommon to have two different showings to occur at the same time, but, for obvious reasons, this practice has stopped.
Mike Spicer, NKAR: Yes, in the explanation of the executive order from our governor, we are permitted to show property in person as long as we practice the guidelines for social distancing.
TLR: Has your association provided guidance or special training to real estate agents about how to continue to do their jobs during the pandemic?
LBAR: As soon as the news hit about the severity of the virus, LBAR became proactive to assist members through the crisis. In addition to emphasizing the guidance from the governor and the CDC, the association created a webpage specifically for coronavirus information and started sending regular updates by email to every agent. Our social media presence also increased exponentially as changes were coming in so frequently. We conduct webinars and online interactive sessions with brokers and agents to share relevant information but to also gain feedback from what they are experiencing in their activities. We’re currently compiling a list of specific best practices not just from realtors but from lenders, title professionals, home inspectors and appraisers to try to keep everyone informed of ways to keep folks safe throughout the process.
GLAR: Yes, GLAR has repeatedly sent out emails and/or videos with pertinent information to assist the agents and protect them and their clients while doing their jobs.
NKAR: NKAR has provided almost daily updates with suggestions and links to information to help guide them through this unprecedented time.
TLR: What message would your association want to convey to people thinking of listing their homes or considering starting a home search right now?
LBAR: Despite all that’s going on in the world, it remains a good time to list your home for sale. Interest rates remain low and prices remain extremely strong. There may be fewer buyers in the market at the moment, but there are simply not enough homes on the market to meet the demand and, again, that’s a trend that’s been going on since before the coronavirus. Lots of people need to buy and lots of people need to sell – and realtors are here to help folks be “healthy at home.”
GLAR: While these are not normal conditions in which we typically list homes, we recognize that there are still sellers who need to sell and buyers that need to buy, and many, due to their life circumstances, have an urgent need and don’t feel they can wait. We continue to find ways to help them through this time of turmoil to achieve their goals.
NKAR: Do it! Contact your realtor and get the ball rolling.
Share your story
We want to hear how business leaders across the state have responded to the challenges presented by COVID-19 and the efforts to stop the spread of it. If your business would like to share its story, email Lorie at [email protected].