COVID-19 and the real estate market | Articles | News
Much has changed in the local landscape in the past two weeks. The school is closed. Restaurants and bars are closed. Gyms and cinemas? You guessed it. Closed.
In the name of social distancing, everyone in Chicago and its suburbs is crouching down and trying to slow the spread of COVID-19.
On the homes front, it seems more like the same. New Moms canceled their Kitchen Walk on April 25th. Frank Lloyd Wright Home and Studio is closed for tours.
Before March 9, the local real estate market showed clear signs of robust spring thaw. We caught up with some local real estate agents to talk about how the spring market could change in the face of the virus fears sweeping the country.
On the first weekend of the closure, local agents said that little had changed in the real estate landscape.
Steve Scheuring of Compass notes that he had six shows on March 15 and more on March 16. Of a family he works with who want to move out of their rent, he says: “There are people out there who have to buy.”
Linda Rooney, an agent at Oak Park’s ReMax in the Village, said she was very busy at an open house on Sunday, March 15.
“For the first 45 minutes I thought no one was going to come and then I got bombed,” said Rooney.
She notes that 10 groups walked through the house and they were all interested buyers, not nosy neighbors.
While the fear of illness didn’t stop prospective buyers from the open house, Rooney said she made some changes, including disinfecting wipes on hand and registering all visitors themselves so there was no pen shared. She also states the salespeople told her they did a hospital-level cleaning after the open house.
But this could be Rooney’s last open day for a while.
According to Rooney, ReMax has asked agents not to hold open houses for the remainder of March and plans to reevaluate them later this month.
Michael Nowicki of Oak Parks Ideal Location Realty says he will hold open homes if his sellers so request, but he believes few customers will request it in the current area.
“I tell people, ‘You will have pretty much 10 to 15 people walking through your house and touching things,'” Nowicki said. “People don’t want that right now.”
Nowicki also takes more precautionary measures with his customers. He notes that he is making sure customers are healthy and not at an age where exposure to others is an issue. He says he isn’t worried about himself but doesn’t want customers to get sick.
“You don’t want to pass it on to others,” he said. “You have to look at it from all angles.”
Nowicki also notes that he does not ask that potential buyers wear boots over their shoes during a house tour, but that he hand out gloves for each exhibition. Rooney says she will be running virtual shows for any clients who would like her to preview the homes for them.
Erica Cuneen, managing broker for Beyond Properties, emailed a list of new guidelines for their agents to help them deal with the virus. Chief among them they canceled open houses.
She also said that social distancing practices should be used when showing homes. Agents do not open doors with bare hands, keep their distance from customers during tours and no longer drive with customers in the car. In addition, their agents can provide video tours and virtual finishes for customers to avoid the need for interaction.
She also states that with great caution some sellers have taken their homes off the market and will hold the listing for a few weeks or put the home on the private listing market.
Cuneen says this may also be an attempt to limit market time and that people should consider the virus when considering market time.
“This will definitely change market times,” she said. “It shouldn’t necessarily be viewed as negative at this point.”
Scheuring believes that some sellers may want to move their homes to the private listing network in order to limit the number of potential buyers and to ensure they take certain health precautions.
Spring market is changing
Prior to the social distancing measures, local realtors reported that the Oak Park and River Forest spring market was strong. Nowicki attributed much of this to low interest rates.
“For Oak Park, the low prices are a godsend,” he said. “This will make tax burdens less of a concern. I haven’t heard a buyer complain about taxes this year, which they haven’t in the last two years.”
Scheuring said March could be one of its highest sales months in 20 years, but stated the Oak Park and River Forest area wasn’t a seller’s market even before the virus.
“We’re crowded, but it’s not that the market is great,” he said. “The thing is, prices went down to the point where buyers decided to buy, and the prices were great.”
According to Scheuring, the sellers were more motivated to cut prices in order to get rid of houses they no longer live in. Last year’s polar vortex created a lot of maintenance problems for vacant houses in the market.
“If a seller has already left the house, he is motivated to lower the price,” said Scheuring. “We saw sellers making offers to buyers when they came through the door.”
Uncertainty for the future
All brokers expect continued uncertainty in the coming weeks or months. Scheuring points out that remittance stamps for transactions must be purchased in person, which could be an issue after the Oak Park village government put an on-site order in place.
While Forest Park is still open for major business, Oakicki says Oak Park has already switched to an appointment-only system for transfer stamps and final water bills.
River Forest City Hall is changing operations and has temporarily suspended transfer inspections, but can remotely access final water readings so the village can continue to process transfer stamps.
The village advises that paperwork cannot be delivered in person, but through the green mailbox in the meetinghouse, and indicates that paperwork may take longer than usual to process.
Scheuring predicts that buyers will withdraw for some time. Rooney agreed, stating, “We just have to see. The uncertainty is really tough, both in the market and for our families.”
Nowicki said the greater the uncertainty, the more it will hurt the real estate market.
“There’s a direct correlation between the two,” Nowicki said. “I think if that clears up quickly there will be a big rush. There will be sellers and buyers ready to go. If this takes five to eight weeks, we’ll look at some interesting scenarios.”
Cuneen believes there will be some slowdown in the face of the ever-changing news, but says that even if potential buyers limit themselves to their own homes, they are still looking for homes online.
“People still have to move for jobs or for school,” said Cuneen. “It’s still a good time to buy and sell and we must try not to panic.”
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