As of early August 2020, the United States alone has had just over 5,400,000 confirmed coronavirus cases. The COVID-19 pandemic took us all by surprise and has changed how we live.
It has had an impact on work, social life, businesses, travel, and the real estate industry. Since the first days of quarantine, significant investments like real estate have taken a backseat, as people view essential needs more critical at this time.
We’re going to take a closer look at the impact the coronavirus has created on the real estate industry.
Young Adults are Moving Back Home
First-time home buyers are typically those who have recently graduated and established their careers. These young adults are still looking for areas with “numerous restaurants and bars to suit every taste,” states the experts at Victory Park Apartments.
However, with the pandemic and financial uncertainty, young adults are opting to move back in with their parents. With the risk of losing their job, this large percent of home buyers are not looking to commit to a mortgage.
This has resulted in a decline in sales, directly impacting real estate employees, who work on commission. It’s also a problem for those looking to sell their homes, as fewer potential buyers are looking.
Risk of Exposure
When you’re going to sell your home, there are specific requirements that need to get checked. You need an appraiser, pest inspector, roof inspector, and a full home inspector. This means multiple people going into a home, which creates a risk of spreading the virus.
Next, you’ll need a real estate agent and potential buyers coming to view your home. You need to invite all of these strangers, who could be infected, into your living area.
With the pandemic outbreak, people have stalled these processes to protect themselves and others from contracting the virus, impacting the real estate industry’s sales.
Difficult to Acquire Proper Paperwork
When the quarantine started, only essential businesses were allowed to be open, while everyone else was sent home. This includes government offices, notaries, insurance companies, and more.
This creates a challenge for real estate agents that need specific paperwork signed and notarized. Without these signatures, some processes can’t be approved, and it makes everything take longer.
Although some signatures can be done digitally, all the forms needed to be converted and changed, which takes time. Many home buyers and sellers needed to wait until more businesses were allowed to be open.
Trying to Move Towards Digital
As the whole world took a break from physical interaction, the real estate industry had to think on its feet. This intensely personal process of meeting your clients and viewing homes together needed to all be done digitally.
People were quick to adapt to scheduling virtual open houses and showings of homes. They had online, face-to-face negotiations and, in some cases, could even use digital signatures.
The personal connection with clients is lost by doing this, but it’s a safer way to conduct sales than having people come and go into a home.
People Unable to Pay Mortgages or Rent
As much as this is a medical concern, COVID-19 has significantly impacted the financial security of many of us. People woke up one morning without a job because of new restrictions.
It’s been reported that 45% of Americans don’t have savings and live paycheck to paycheck. The coronavirus outbreak has left many people unable to pay their bills because they need food and other items.
The government has acted on this concern creating the Rent and Mortgage Cancellation Act of 2020, which states the suspension of paying for rent and mortgage, without getting evicted, having debt, having to repay, or impacting their credit score.
This has tremendously helped people during this time, but the real estate industry has taken a financial hit.
The Bottom Line
One of the things that we’ve seen through this pandemic is humans’ ability to adapt to situations. We’re not living in an ideal state right now, but we’re making it work. As for the real estate industry, it’s seen a lot of impact and change because of the mandatory quarantine.
We hope that things will get back to normal soon; however, we all must continue to do our part to reduce the spread and protect the most vulnerable. Buying a home or selling a house the traditional way might have to wait until next year, or just be done virtually until further notice.
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Our professionals are following all regional & national guidelines while working from remote locations across the United States. Despite these difficult times, the HCO team remains committed to helping anyone who needs to sell a house fast in the days, weeks and months ahead.
You don’t need to leave your property to speak with one of our professionals 24 hours a day, 7 days a week. And if you’re ready to sell a house now, it’s as simple as click, offer, close, and we’ll get you the cash you need. There are no agents, no fees, no showings and no repairs!
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