It appears that Realtors, homebuyers and home sellers are adjusting to a new way of conducting business.
Because of the COVID-19 pandemic and Gov. Gretchen Whitmer’s executive order, the real estate industry in Michigan was not classified as essential beginning March 23. Transactions already
in the process could be completed, however, new in-person communication was prohibited.
The governor lifted the executive order for real estate May 7, with restrictions. The real estate industry could work again provided that:
• Any showings, inspections, appraisals, photography or videography, or final walk-throughs must be performed by appointment and must be limited to no more than four people on the premises at any one time. No in-person open houses are permitted.
• Private showings may only be arranged for owner-occupied homes, vacant homes, vacant land, commercial property, and industrial property.
Carol Ray, associate broker/Realtor for Berkshire Hathaway HomeServices Michigan Real Estate in Fenton, said the market has come back nicely since the governor allowed Realtors to show properties.
“We are working with some limitations, but all are adjusting,” she said. “Home prices remain steady with a small increase and interest rates remain low.”
Ray said there is still a lack of good homes on the market. “Homes in the $170,000 to $320,000 range are selling in days,” she said. “Buyers must be qualified and ready to compete with multiple offers on the same home.”
Ray added that some buyers are offering higher than asking price and offering to pay more than appraisal price, if necessary. “Having said that, selling is not a slam dunk,” she said. “Some sellers know there is a shortage of homes on the market and want to price their home too high. An overpriced home will linger on the market and actually sell for less than it would have had it hit the market at the correct price.”
Ray said the pandemic has made things different for everyone. “When we list a home, we allow only a maximum of four in the home at one time. We require the potential buyers to wear masks, booties and use hand sanitizer before entering. We ask sellers, if possible, to have the lights on and closet doors open so buyers aren’t touching unnecessary surfaces.
“We are optimistic the market will stay robust until the fall. If we have another outbreak, it may slow sales down again.”
Patrik Welty, broker and owner of Legacy Realty Professionals, Inc. in Fenton, said everything in the real estate industry is different right now. “Absolutely,” he said. “Every step in the process is different.”
As a Realtor, much of their dealings are done in person and Welty said it’s so important to be respectful of the wide range of opinions and concerns regarding the coronavirus. “We have to adhere to the laws but be courteous,” he said. “Some people are much more concerned about the virus risks than others and we have to pay attention to how people feel and respect that.”
Welty said buyers are “all in” right now, compared to sellers. He said sellers are slower to get back in the market than he expected. He said the likely cause is that it takes longer to get their home ready to show because of the stay-at-home order. Some of the work that sellers needed to get done was illegal to do.
A poll of his agents showed Welty that on average they each expected to list 35 properties, however, in reality, they listed just half of their projections, after two weeks back at work.
Welty said there are currently 191 homes in the Fenton, Lake Fenton and Linden school districts’ market with an average asking price of $382,000. The number of available homes is down 11 homes over last week – or just over 5 percent.
He added that there are currently 122 pending home sales with an average asking price of $280,000. This number is up 28 homes from last week and the asking price is up $10,000. “We also anticipate this number to continue to rise as the weather warms up and more people head back to work,” he said.
In the coming week, Welty said as sellers complete their finishing touches, he expects both homes for sale and pending transactions to continue to rise.
“Anecdotally, we have received several full price offers on our homes we are representing, which is encouraging,” he said. “We have seen some buyers drop out of the market due to job loss or reduced wages but clearly this has not hampered the sale of the new inventory coming to the market. For those considering selling, now is an excellent time.”
Working with buyers and making sure their pre-qualification letters are up to date is essential. Criteria before the pandemic could have changed and Welty recommends buyers be aware of those changes so that they will qualify for loans in the current environment.