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In the last two months, many countries, including the United States, went into lockdown to combat the rapid spread of COVID-19 and reduce the chances of at-risk people, such as the elderly and those with autoimmune disorders, getting infected by this new strain of coronavirus. While this measure helped mitigate the pandemic, it also resulted in dozens of industries shutting down and millions of people losing their income and jobs.
For the real estate industry, the pandemic also had a lot of noticeable effects. Even in Texas where real estate was declared as an essential service, the impact of COVID-19 in the housing market can still be felt from late March.
The Houston Association of Realtors (HAR) reported that strong sales in the beginning of the month was key to offsetting the impact of the pandemic in the latter part of March. As of writing, HAR hasnt published their monthly MLS press release for the month of April yet. This should give us further insight as to the full impact of COVID-19 in the Houston housing market.
Market prices remain largely unaffected and transactions in the real estate industry are still very much ongoing. The biggest changes in buying and selling during these times affect typical on-site processes such as open homes and house showings, house inspections, and closings.
Open houses and showings
HAR previously dropped display notices on their website, and despite Texas slowly reopening again, many realtors still discourage them.
Showings now adhere to safety guidelines such as those proposed by the National Association of REALTORS. They suggest that only 1 buyer must enter the house at a time, and anyone lining up for a showing must stay at least 6 feet away from other guests.
Other safety guidelines include having hand sanitizers available for use, hand washing stations, no shoes inside the house, no children allowed during showings, and wearing of face masks.
House inspections and appraisals
Many are now embracing desktop and drive-by appraisals. This means that they appraise a home based on tax records and listing information. Some drive by the home and check the exterior for a more accurate appraisal.
Inspections are now usually done with inspectors visiting the house alone and recording the inspection to show to their clients afterward.
Mortgages backed by FHA, VA, USDA, and Fannie Mae and Freddie Mac are offering reduced or deferred payment options for 6 months. If your mortgage is not federally backed, it might still be covered by the mortgage relief section in the Coronavirus Aid, Relief, and Economic Security (CARES) Act. To know what type of mortgage relief you can avail, its best to discuss it with your mortgage servicer.
Foreclosures and evictions are also largely halted particularly for FHA, Fannie Mae and Freddie Mac backed mortgages. Many private lenders also halted foreclosures and evictions for the next few months.
Your credit score is also covered by the CARES Act. This means that any missed payments during the pandemic shouldnt impact your credit score negatively.
Although the current state of the industry is bleak with many sellers pulling their listings out, and many buyers wary of making any big moves, the forecast is still bright for real estate.
Based on information on past pandemics compiled by Zillow, real estate activity fell sharply during the height of the pandemic but bounced back quickly after.
Homes will still need selling and potential buyers can expect an influx of listings in the near future. Right now, its important to stay on top of things. Watch for trends, forecasts, and news about the Houston housing market. Whatever your decision is, make sure its an informed one.
