Coronavirus had upended many industries throughout the City and has caused others to make adaptations to continue operating safely. In the real estate world, the pandemic has made some wary of moving, while others are still enthusiastically searching for their next home.
The real estate business has had to make several changes to the way it operates amidst the pandemic. The Patriot-Bridge spoke with Coldwell Baker realtor Grace Bloodwell to see what her thoughts are on how the real estate market has been affected by the virus.
Bloodwell does both rentals and sales in Charlestown and throughout the rest of Boston, as well as in Somerville and Cambridge.
“There has been a push to put content on the internet,” Bloodwell said—through floor plans, virtual tours, video tours, and photos—“because buyers want to get educated on the property prior to committing to a tour given the climate.”
She said that her office is giving tours only once a buyer has reviewed documents. “A lot of agents are screening buyers to ensure they have sought a pre-approval so that we know that they’re capable of buying so that they seller is confident that the buyer is a real buyer, so to speak,” Bloodwell said.
As for rentals, she said the rental season doesn’t typically start until after May, but “COVID-19, in my opinion, has eliminated a lot of the pre-season search. I think it’s too early to tell the impact of COVID on apartments from a statistical standpoint.”
But, she said a challenge she foresees will be determining whether current tenants in apartments will be comfortable with brokers or owners showing units to prospective tenants, and she is also uncertain whether a lot of tenants will be comfortable signing a lease virtually without seeing the apartment in person, but this “remains to be seen.”
While there are a lot of empty apartments right now that would alleviate the issue of touring occupied units, “the tricky thing is” that a lot of landlords want tenants in now— but many people are looking for September leases, Bloodwell said.
Bloodwell said that the interest in buying a home during the pandemic is “fractured,” as some buyers are continuing their search and are “extremely engaged” as they are working from home and have more time to look online. “It might be an element of boredom for some people,” she said.
However, there is “another subset of people who are on the sidelines waiting to see where it shakes out,” she added.
She said that at the beginning of the lockdown, there was a “general pause, wait, and see” moment as people waited to see what would happen with the virus. “We observed that there was a disproportionate amount of off-market deals occurring,” Bloodwell said. She said that brokers and sellers weren’t comfortable listing on the Multiple Listing Service (MLS) because open houses would violate the stay at home advisory and potentially the ban on gatherings of ten or more people.
She said sellers were also wary of having properties be listed on MLS and appearing to have more days on the market than they wanted, so many sold off-market instead.
The pandemic might also have an effect on where people are looking for places to live, though it is probably too early to come to any concrete conclusions. New data from Apartment List shows that 31 percent of its users who are looking for an apartment in Boston are looking from outside the metro area, and 35.5 percent of people living in Boston right now are searching for homes elsewhere.
“In terms of the extent to which COVID-19 might be affecting these trends, we looked into this by breaking out the Q1 data into two periods using a cutoff of March 11—the date when the World Health Organization officially declared COVID-19 to be a pandemic,” said Chris Salviati, a housing economist for Apartment List. He said that the analysis of this data resulted in “largely consistent trends” before and after the March 11 cutoff date, and reflects searches, not moves that have been carried out.
“Although moving activity has been put on pause temporarily, search activity is continuing, and location preferences (at least of the metro-level) don’t yet appear to be significantly altered,” Salviati said. “While we expect that the pandemic could have notable impacts on mitigation trends, these are likely to play out over a longer time horizon, so it may simply be too soon to observe big changes in our data.”
Blodwell said that this week, next week and heading into June, people will likely be more comfortable putting properties back on MLS as Massachusetts slowly heads towards a downward trend in cases.
She said that many agencies, including Coldwell Banker, also have certain coronavirus addendums available for people to sign to protect clients.
Bloodwell said that while she sees some of the virtual elements like more photos and videos available online staying long past when social distancing will still be necessary, but “real estate is very personal still,” she said. “Most buyers will not be comfortable making purchases with online material.” She said that a “fusion” of online and in-person tours and materials will be more likely. “Nothing replaces a live tour,” she said.
“We feel as though there’s a lot of pent-up seller and buyer demand now and we think that the likelihood of a very active season is extremely high,” Bloodwell said. But she said she doesn’t know what impact the pandemic will have on prices.
“For the short term,” she said, the market is “really going to be placed on supply and demand. Real estate is really tied into that index.”