The Effect of COVID-19 on Our Housing Market
The Metro-Milwaukee MLS (Multiple Listing Service) gathers real estate stats for each month, and compile data points into easily digestible graphs for real estate professionals and consumers alike. Additionally, they highlight recent events to provide a comprehensive real estate market report. I’ve included the portions of their March 2020 report, released April 10th, that pertain to our hyper-local market here in Southeastern Wisconsin.
Also, I’ve included some data released by ShowingTime, which is the showing scheduling tool used by nearly a million real estate professionals in over 250 MLS’s, for some additional insight to the impact of the current COVID-19 crisis. The information provided by ShowingTime is in real time and nationwide, to provide a more up-to-date, wider vantage point.
As COVID-19’s impact spread across the country in March, the stock market declines started in February accelerated downward before recovering a bit in the last week of the month. With volatility across all the financial markets, lenders began tightening underwriting standards and some buyers found they no longer were approved for a loan. Massive layoffs also shook the economy with 6.6 million initial jobless claims filed in a single week—double the number last week and ten times higher than any other week on record prior to this month.
[…] While the effect of COVID-19 is varied throughout the country, we are likely to see impacts to housing activity now and into the coming months. Its continued spread is leading many companies and consumers to change their daily activities.Metro Milwaukee MLS ‘Monthly Indicators Report’ © 2020
The Local Market Update, showed some interesting trends. Compared to March 2019, Walworth County had 6.5% fewer new listings (200 vs. 219), but 5.1% more closings (124 vs. 118) AND a nearly 20% increase in median sales price ($268,450 vs. $224,000). Additionally, days on market (until sale) have gone down 16.1% (78 days vs. 93 days). Zooming into my local area, the Lake Geneva/Delavan/Williams Bay area, things went a bit differently. We saw 26.7% more new listings, but 10.5% less closings in March 2020, compared to March 2019. However, there was a substantial 42.2% rise in median sales price AND a 28.3% decrease in days on market!
What does this mean for Walworth County? Well, logically, given the current pandemic, less sellers put their homes up for sale; however, more sellers sold their homes, for more money, and in less time, this March compared to last.
While our local market (LG-Delavan-WB) is so small that the numbers are often not an accurate depiction of the market at whole, the increase in median sales price for March 2020 compared to last year was seen across our tri-county area. Call me a Pollyanna (I’ve been called worse), but this makes me optimistic.
Next, let’s check out how property showings have been… infected. Governor Evers declared that real estate is an “essential business” allowed to continue operations, despite his ‘Safer at Home’ order (recently extended to May 26th). This makes sense to most, given that we need a home in order to abide by said order.
That being said, many of my buyer clients have been laid off, others have had significant cuts in their pay, and a handful even had to close their business doors, as a result of this order. I honestly feel guilty going on showings, with my few remaining buyers, given the financial hardships facing my other clients, friends & family members.
Side Note: I wear gloves to every showing, and make my buyers follow suit. If the home is owner-occupied, we also wear masks. Follow this link for CDC guidelines on how to protect yourself and your loved ones.
Sellers, similarly, are stuck between a rock and a hard place. Many brokerages are sending out COVID-19 consent forms for the agent and buyer(s) to sign, certifying he/she is not sick, has not tested positive, or come in contact with someone who has tested positive… but there is no denying the fear remains.
As a reminder, this virus went ‘pandemic’ status Wednesday, March 11th. ShowingTime has accumulated data across over 250 national MLS’s and published The Impact of COVID-19 on Real Estate Showings, and the graphs speak for themselves. According to ShowingTime, showings are down 58.4% nationally, and down 37.8% in Wisconsin, compared to this time last year (charts created 4/16/2020).
The two charts above breakdown our local market showings by price point. Please take note of the scale along the bottom. There number of showings have decreased by the hundreds in the past month alone.
I have done many ‘virtual showings,’ and a ‘virtual open house,’ but it’s not the same. Buying a home is often the largest, or one of the largest, purchase one makes in their lifetime – would you be comfortable buying a home you haven’t seen with your own two eyes? Without stepping foot inside your new home until you’ve left the closing table? I wouldn’t, but that’s just me.
I could understand, for example, a multi-family property investor putting an offer on a home, sight unseen, if what they primarily seek is an occupied, income producing rental property. Furthermore, a few years ago, I was part of a transaction where the buyer had a job transfer, and was not able to see the property he purchased in person beforehand. Regardless, these are not regarded as optimal property purchase scenarios. Different, but not preferred.
Overall, I have never more content living here in Wisconsin, an hour away from any major metropolitan city, without public transportation. Post-pandemic, I do think more people will be moving out to the countryside. However, this virus has clearly impacted real estate. The long term effects of the CARES act and mortgage forbearance have yet to be revealed. We must stay vigilant with our finances, now more than ever.
I’ve been using my free time at home to stay in tune with our local and national real estate markets, as well as the overall economy. We will recover from this, eventually, if we all do our part. Remain at home, if you can; take precautions, if you can’t. We are all in this together.
Stay safe & healthy ❤ , Annie Z.
LICENSED REAL ESTATE AGENT
KEEFE REAL ESTATE | LAKE GENEVA, WI 53147
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