COVID-19 and the real estate market

After a good start to spring sales, now uncertainty reigns

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By Lacey Sikora

Contributing Reporter

In the past two weeks, a lot has changed in the local landscape. School are closed. Restaurants and bars are closed. Gyms and movie theaters? You guessed it. Closed. 

In the name of social distancing, everyone in Chicago and its suburbs is hunkering down and attempting to slow the spread of COVID-19.

On the Homes front, it appears to be more of the same. New Moms has cancelled its April 25 Kitchen Walk. The Frank Lloyd Wright Home and Studio is closed for tours. 

Before March 9, the local real estate market was showing decided signs of a robust spring thaw. We caught up with a few local real estate agents to talk about how the spring market could change in light of the virus fears that are sweeping the country.

Change in behaviors

The first weekend of the shutdown, local agents said there was little discernible change to the real estate landscape. 

Steve Scheuring of Compass notes that he had six showings on March 15 and more scheduled on March 16. Speaking of one family he is working with who want to move out of their rental, he says, "There are people out there who need to buy."

Linda Rooney, an agent with Oak Park's ReMax in the Village said she was very busy at an open house on Sunday, March 15. 

"The first 45 minutes, I thought no one was coming and then I got bombarded," Rooney said.

She notes that she had 10 groups go through the house, and all of them were interested buyers, not curious neighbors.

While the potential buyers didn't let the fear of illness keep them from the open house, Rooney says she did make some changes, including having disinfectant wipes on hand and signing in all of the visitors herself, so that there was no shared pen. She also states that the sellers told her they conducted a hospital-level clean after the open house.

But, that might be Rooney's last open house for a while. 

Rooney said ReMax has requested that agents not hold any open houses for the rest of March and plans to reassess at the end of the month. 

Michael Nowicki, of Oak Park's Ideal Location Realty, says that he will hold open houses if his sellers request it, but he thinks few clients will request it in the current environment. 

"I'm telling people, 'You're pretty much going to have 10 to 15 people walking through your house touching things,'" Nowicki said. "That's not something people want right now."

Nowicki is taking more precautions with his buyer clients as well. He notes that he does make sure clients are healthy and not of an age where exposure to others is a concern. He says he is not concerned about himself, but doesn't want any clients becoming ill.

"You don't want to pass it along to others," he said. "You have to look at this from all of the angles."

Nowicki also notes that rather than requesting that prospective buyers wear booties over their shoes while touring a home, he plans to hand out gloves for each showing. Rooney says she will offer virtual showings for any clients that would like her to preview houses for them.

Erica Cuneen, managing broker for Beyond Properties, emailed a list of new policies for her agents as guidance while dealing with the virus. Chief among them, she cancelled open houses. 

She also said social distancing practices should be used when showing houses. Agents will not open doors with bare hands, are keeping their distance from clients while on tours and no longer ride in the car with clients. In addition, her agents can provide video tours and virtual final walkthroughs for clients to avoid the need for interaction.

She also states that some sellers in an abundance of caution have taken their homes off the market and will hold the listing a few weeks or put the house on the private listing market. 

Cuneen says this can also be an effort to limit market time, and states people should take the virus into account when considering market time. 

"This is definitely going to change the market times," she said. "It shouldn't necessarily be seen as a negative at this time."

Scheuring says he expects that some sellers will want to move their homes to the private listing network to limit how many potential buyers come in the door and make sure they take certain precautions in terms of health. 

Spring market changes

Prior to the measures being taken for social distancing, local brokers reported that the spring market in Oak Park and River Forest was strong. Nowicki credited a lot of that to low interest rates.

"For Oak Park, the low rates are a bit of a godsend," he said. "It makes the tax bills less of an issue. I have yet to hear any buyer complain about the taxes this year, which has not been the case for the last two years."

Scheuring said that March may be one of his highest months for sales volume in 20 years, but states that even prior to the virus, the Oak Park and River Forest area was not a seller's market. 

"We've been swamped, but it's not that the market is great," he said. "It's that the prices got down to a point where buyers decided to buy, plus the rates have been great."

Scheuring says that sellers have been more motivated to lower prices to get rid of houses they no longer live in, noting that last year's polar vortex caused a lot of maintenance issues for vacant homes on the market. 

"When a seller has already left the house, they are motivated to lower the price," Scheuring said. "We were seeing sellers making offers to buyers as they came through the door."

Uncertainty for the future

All of the brokers expect continued uncertainty in the coming weeks or months. Scheuring points out that transfer stamps for transactions need to be purchased in person, something that could be a problem now that Oak Park village government has instituted a shelter-in-place order. 

While Forest Park is still open for essential business, Nowicki says that Oak Park had already moved to an appointment-only system for transfer stamps and final water bills. 

River Forest's Village Hall is modifying operations and has temporarily suspended transfer inspections, but can get final water readings remotely, so the village can still process transfer stamps. 

The village advises that paperwork can be dropped off at village hall via the green mailbox rather than in person, and states that processing paperwork may take longer than usual.

Scheuring predicts that buyers will pull back for a time. Rooney agreed, stating, "We'll just have to see. The uncertainty is really tough, both on the market and on 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 do think that if this resolves quickly, there will be a big rush. There will be sellers and buyers who are ready to go. If this goes on five to eight weeks, we'll be looking at some interesting scenarios."

Cuneen thinks that there will be some slow down given the ever-changing news, but says that even when confined to their own homes, potential buyers are still looking at homes online.

"People still have to move for jobs or for school," Cuneen said. "It's still a great time to buy and sell, and we have to try not to panic."

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