It’s the beginning of prime house-hunting season in Seattle, but a cloud of uncertainty sits over the market due to the spread of coronavirus across the region.
On Wednesday, Glenn Kelman, CEO of tech-powered real estate brokerage Redfin, authored a blog post saying homebuying activity slowed rapidly in the Seattle area. Kelman wrote that agents have seen “a significant drop in demand” in the past three days, just after pending home sales hit the second-highest level in two years a week prior, per the National Association of Realtors.
“Redfin’s demand fluctuates plenty from day to day, especially in a single market, and this may only be a significant but short-lived reaction to the first serious virus infections on the U.S.,” Kelman wrote. “It could also be more serious, and affect the rest of North America.”
Jeff Reynolds, a broker at Windermere Real Estate focused on condos, hasn’t noticed any slowdown in the Seattle market so far. He’s seeing the same number of showings for a condo project in the Wallingford neighborhood compared to a month or so ago, before the virus took hold in the Seattle area.
Record low mortgage rates as a result of the virus have some buyers feeling a “sense of urgency” to get a deal done quickly, Reynolds said. In Seattle’s competitive housing market, some buyers will surely want to take advantage of anything keeping rival suitors on the bench.
“We don’t necessarily anticipate a monumental shift in buying activity,” Reynolds said. “Maybe traffic will be down, but I haven’t experienced that yet. I think there is definitely a contingent of people who look at this as an opportunity.”
J. Lennox Scott, CEO at John L. Scott, agreed.
“Current conditions make this a very favorable time for home buyers; current homeowners who are not looking to sell may also benefit from a refinance with the current rates,” he said in a statement to GeekWire.
These contrasting reports are representative of the general uncertainty created by the spread of COVID-19 in Seattle and across the nation. This has played into the volatility of the stock market in recent weeks as well — investors don’t like uncertainty.
“Uncertainty over the spread, severity, and length of the coronavirus outbreak adds to the challenge of estimating the impact on the housing market,” Frank Nothaft, chief economist at property data company CoreLogic, told Yahoo Finance. “Nonetheless, some economic impacts are clear. Economic growth will likely be slower this year than was previously thought. A recession in 2020 is unlikely but can’t be ruled out.”
In China, where the majority of confirmed coronavirus cases have been reported, the housing market has basically shut down. Despite a number of apps and services that allow people to tour homes virtually, activity has slowed to a crawl.
MarketWatch reported last month prices for new homes rose a paltry 0.27 percent from December to January in 70 big China cities. Home sales declined by 90 to 98 percent year-over-year, according to surveys from China Merchants Securities and Huatai Securities cited by MarketWatch.
The concerns Redfin has seen in Seattle, which has become ground zero for coronavirus in the U.S., haven’t reached other parts of the country yet, Kelman wrote.
The Portland, Ore. area has several confirmed cases, but Redfin’s market manager there said he hasn’t seen much of an impact, Kelman wrote, outside of a few customers requesting private meetings with brokers rather than getting together at coffee shops and other public places. Redfin employees on the ground report continued strong demand in the middle of the country, especially in places such as Chicago, Washington D.C., Virginia and Boston.
Kelman also used the blog post to promote several features that allow Redfin to conduct sales virtually, such as video tours of homes.
For homebuyers who want to see homes without leaving home, Redfin launches on-demand video tours. We're using three-dimensional scans to let sellers skip open houses. Customers' reaction to coronavirus? Some are pouncing on deals. A few are pulling back. https://t.co/LWmZXLxmpj
— Glenn Kelman (@glennkelman) March 4, 2020
In Seattle, workers at both Amazon and Facebook have tested positive for the virus. Amazon, Microsoft and others are asking employees to work from home over the next few weeks, which is in line with new guidance from King County health officials.
King County public health officials reported 20 new confirmed cases of COVID-19 Thursday, including one additional death. That brings the total for King County to 51 confirmed cases, with 10 deaths.