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Coronavirus throws uncertainty into real estate’s busiest season

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This June 20, 2019, photo shows an existing home is offered for sale in Rutledge, Ga. On Thursday, June 27, Freddie Mac reports on this week’s average U.S. mortgage rates.
A new survey by the National Association of Realtors suggests home sales could drop by 10 percent as a direct result of the coronavirus.  John Bazemore / The Associated Press

For the first time in his 30-year real estate career, Melvin A. Vieira, Jr. finds himself wondering whether holding a routine open house could risk his client’s health. His client, a woman in her 70s, is eager to sell her home, but Vieira is weighing the potential ramifications of what could be dozens of people traipsing through her house in the era of COVID-19, which has been shown to affect older adults the most seriously.

“People are going to come to her house; I can’t screen them [for symptoms]. Do I tell them: ‘Please enter, but do not touch? Put a mask on and come through?’ ” said Vieira, who is with the Vieira Group at RE/Max Destiny in Jamaica Plain. “Now I have to really do a deep dive within myself to what I think is the best way to protect her, myself, and everybody else.” 

COVID-19, the coronavirus the World Health Organization has deemed a pandemic, is already affecting the start of the spring real estate season, historically the busiest in the industry. 

A new survey by the National Association of Realtors found that 1 in 4 home sellers is requiring prospective buyers to wash their hands, use hand sanitizer, remove shoes, or wear shoe covers. The survey also suggests that home sales could drop by 10 percent as a direct result of the coronavirus. 

Locally, the season got off to an early and strong start based on pending sales figures for the month of February from the Massachusetts Association of Realtors. Low interest rates and mild weather were among the factors credited for a 25 percent year-over-year increase in the number of single-family homes under agreement last month, and a 19 percent increase for condos, according to MAR. 

Normally, pending sales numbers act as “the canary in the coal mine” for the coming season, but COVID-19 threatens to throw a wrench into that, said Tim Warren, chief executive of The Warren Group, a real estate research firm and publisher of Banker & Tradesman. In February, the virus had not yet been declared a pandemic, and Massachusetts was not yet under a state of emergency. As of early Thursday afternoon, there were 95 confirmed COVID-19 cases in Massachusetts, no deaths, and more than 1,000 people subjected to quarantine, according to state public health officials.

(Get the latest news on the outbreak at Boston.com.)

“There is a fear of job loss because of the virus, or a recession that could make people cautious about buying homes,” Warren said. “If I were a buyer, I probably figure there would be a weakness in the real estate market that is waiting to show up, so I might postpone. [As a seller], if my house wasn’t on the market, I might hold off to get people to stay away from my house.” 

But even as the National Association of Realtors survey suggested that there’s been a slight decline in buyer interest due to COVID-19, locally, the market continues to show signs of strong demand, said Kurt Thompson, MAR president. 

“We’re still seeing plenty of activity out there from buyers, because the interest rates are so low and they’re hoping to lock them down,” Thompson said. “I expect, as we move forward, that there will be additional precautions. So, for example, if it’s an occupied property at open houses, there might be some sellers not willing to open up their homes. Both buyer and seller agents will be cognizant to monitor their health and ask any clients they’re working with whether they’ve been sick.” 

Thompson, a broker with Keller Williams Realty/North Central in Leominster, said an open house in Shirley last weekend attracted a dozen people and garnered multiple offers over the asking price. Agents, including himself, are starting to forgo handshakes for fist bumps, elbow bumps, and even toe taps in response to the coronavirus. They’re also starting honest conversations with clients, asking whether they’ve been sick or traveled recently, he said. 

The National Association of Realtors has issued a coronavirus guide for realtors that includes advice on assessing the pros and cons of holding an open house or driving a client to a one-on-one showing.

Thompson does anticipate a slowdown in open houses as people become increasingly anxious about the spread of the virus, but he is optimistic it won’t hurt sale activity, thanks to technology. Already, the vast majority of potential home buyers start their search online, where they can access 3D models of properties, videos, or even virtual reality tours, Thompson said. He suggests agents should already be leaning into this technology, as well as think creatively, such as holding open houses via Facebook Live stream, for instance. 

“A buyer can always put in an offer [after a virtual open house] subject to a satisfactory walk-through of the property,” he said. 

Just as COVID-19 might scare some buyers or sellers away, others are seeing it as an opportunity to get a leg up in the region’s notoriously competitive and expensive market. Thompson said he has heard from people who were thinking of buying later in the spring wanting to jump in now because of lower interest rates. The benchmark average for a 30-year fixed-rate mortgage as of Thursday was 3.36 percent, according to the latest survey from the mortgage finance company Freddie Mac. 

“If there’s less competition, buyers will be able to afford more,” he said. “If other people pull back, they’ll say, ‘This is my chance to have a shot at something.’ ” 

Vieira, who is planning the open house for his elderly client, said the best-case scenario for the market would be open communication between agents and clients to try to prevent the spread of any illness. The worst-case scenario, he said, would be “if somebody comes and screams they got coronavirus from attending an open house, and that leads to mass hysteria and pauses the real estate market.” 

As COVID-19 continues to affect the stock market, oil prices, and the way people interact with one another, Thompson said the best approach for buyers and sellers is to focus on their long-term goals amid the chaos. 

“This is new and uncharted waters,” he said. “I’m still very optimistic about Massachusetts. Even if we have to shelter in place, I think once we’re through that, we’re going to be in a very good position and homes will continue to sell in that period.” 

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