State’s realtors see unease in local markets

Major conferences being canceled

Ramifications of a global pandemic are starting to ripple through the California housing market as virtual home tours replace inperson showings and homeowners cancel open houses to avoid coming face-toface with potentially infected home shoppers.

On the one hand, alltime low mortgage rates are spurring buyer interest.

But on the other, calls for “social distancing” are changing business customs, with lower attendance at some open houses, hand sanitizer rather than handshakes and doors left open to avoid touching knobs.

Two big Realtor events have been canceled in San Diego and Los Angeles. And both state and national Realtor associations issued advisories about when and how agents can decline to show a home.

“I definitely have clients who have asked us not to hold open houses because of coronavirus,” said Tracey Marcyan, an agent with Keller Williams in North Tustin. “Every one of them have asked that we limit the number of people who come through their house to keep them from being exposed unnecessarily.”

Economic uncertainty overshadows the housing market just as it’s poised for its best spring homebuying season in at least two years.

“Housing is being buffeted by two gale forces moving in opposite directions,” Mark Zandi, chief economist at Moody’s Analytics, told Bloomberg. In all likelihood, he said, a recession “will trump the lower rates.”

That uncertainty is bubbling up across California.

“I am hearing buyers and sellers cancel (deals) due to fear of job security and, really, just the unknown,” said Dilbeck Real Estate agent Lisa Kaul from the Santa Clarita area. “One seller canceled their new purchase even though their home was already sold.” Kaul said her office is now looking into virtual meetings.

A recent survey by the National Association of Realtors showed one in three California homes sellers are changing how their home is viewed due to the novel coronavirus outbreak.

So far, just 4% of California agents have reported homes being taken off the market, and 21% said buyer interest had decreased due to coronavirus, the survey showed. Numbers were higher in California and Washington than in the nation as a whole.

“The stock market crash is no doubt raising economic anxieties, while the coronavirus brings fear of contact with strangers,” NAR Chief Economist Lawrence Yun told Bloomberg.

Both NAR and the California Association of Realtors issued guidelines advising members on how to screen potential clients for the disease and discussing the pros and cons of holding open houses or driving clients around in their personal vehicles.

To avoid accusations of discrimination, the guidelines said, agents must screen all their clients equally or not at all. For example, they can’t ask clients if they traveled to an area affected by COVID-19 — the disease caused by the new coronavirus ? or have a respiratory illness simply because they are Asian, the guidelines said.

Agents should consider “video tours and other methods to virtually tour a property” as an alternative to open houses, NAR suggested.

Online brokerage Redfin touted its long-standing practice of providing virtual home tours and online marketing campaigns for all its listings, saying it “leaves us better prepared for virus fears than many other brokers.” Redfin also created a new tool allowing home shoppers to request a home tour via video chat rather than in person.

Homebuilder stocks also are being affected. Bank of America downgraded stock recommendations and price targets on several homebuilders because of the outbreak’s “inevitable” impact on the U.S. housing market, Bloomberg reported.

“We believe overall demand is likely to at least pause given COVID- 19 uncertainty,” Bloomberg quoted BofA analysts as saying.

So far, information on how the housing market has been affected by the outbreak remains anecdotal. CAR and CoreLogic housing data aren’t due for at least a week or two.

But interviews with nearly two dozen industry professionals show, for the most part, this year’s spring homebuying season hasn’t been severely affected.

Apart from fewer handshakes, the biggest response has been to recordlow mortgage rates, said Tanner Brown, a Hollywood agent and chair of the Greater Los Angeles Realtor Association’s public relations committee.

“With interest rates so low, we’re seeing people jumping on that,” Brown said. “Yesterday we did a broker’s open house, and it was filled with agents all day.”

Traci Sadler, an agent for HomeSmart Professionals in the Coachella Valley, had a similar view. The market “is still going strong,” she said. For example, one buyer flew in from Washington state, checked out a home she was selling, made an offer, then flew back to Washington.

Falling mortgage rates are juicing buyers’ purchasing power, market analyst Steve Thomas wrote this week. For example, payments on a median-priced Southern California home are down $231 a month or almost $2,800 a year from March 2019.

“The impact on affordability is astounding,” Thomas wrote.

While all that buyer competition likely will lead to higher home prices, a handful of industry professionals are seeing changes in client behavior. In some cases, sellers are pulling their homes off the market and buyers are putting off buying a home because of economic uncertainty.