Considering selling your house during COVID?
Spring is normally the busiest time in most real estate markets. More people are listing and shopping for properties than at any other time of year. This year, the spring market came to almost a grinding halt as a result of COVID. Now that it’s mid-May, many sellers are wondering whether they should list. There are a lot of factors to take into account and there are plenty of difficult-to-predict scenarios.
COVID-related factors to think about
Health and safety
First and foremost, there is the health and safety issue. Yours and your family’s, as well as the buyers’. How about your agent and theirs? And the larger general public? We all know that the more interactions we have, the more we are out and about, the greater the number of cases of COVID we have.
Supply and demand
Supply and demand is always something to consider when you are selling a house. The old “is it a buyer’s or seller’s market” question is omnipresent. At this particular time, though, the virus is adding another layer to the complexity of showing properties, which affects the buyer pool. Many buyers do not want to tour properties for fear of exposure to COVID. So there are fewer buyers actively looking right now. (Interestingly, houses have actually been selling to buyers who have NOT visited them in person, but have bought them based on photographs, video, interactive floor plan and 3-D modeling tools. That said, most people would not buy without walking through a house first.)
So there are fewer buyers out there, to be sure. However, there are also fewer properties available for sale right now. Many sellers share the same concerns about exposure, so they are not listing because they don’t feel comfortable having people coming into their homes. There are also sellers that, even if they would allow in-person showings, figure that many buyers have put searches on hold right now, due to infections worries as well as job-related/financial concerns.
Clearly, assessing the supply and demand landscape during COVID is complicated.
With job losses or a reduction of hours, many would-be buyers are too unsure of their economic futures to pursue a purchase at this time. Buyers, though, aren’t the only ones in this equation with murky financial outlooks. What about sellers? Some might feel it’s wise to sell now as they may be forced to downsize in connection with reduced income. Others may decide to take a “wait and see” approach. Then there is the market itself. Will prices rise as pent up demand creates multiple bid situations? Or, with any kind of recession and increased unemployment, will the market soften, causing home values to drop? There are plenty of “industry experts” making predictions, but no one actually knows what the market is going to do in the next several months.
So how should you decide whether to list now?
Define your target buyer.
What kind of demographics best describe the most likely candidate for your property? Then ask yourself if anyone in that group may be under a time constraint to buy now. For example, people who want to be in a new home before the start of the school year (so the kids don’t have to switch mid-year) may be beating the bushes looking for family houses in neighborhoods. People who have sold their homes and will be settling soon (or have recently) are among the most active buyers at the moment. Finally, people experiencing life changes (divorce, new baby, job change, etc.) may not have as much latitude as far as being able to wait to find a house. So try to get a sense of how likely your target buyer may be needing to make a move sooner rather than later.
Examine your competition.
Part of understanding supply and demand requires you to understand how your property compares to others for sale. If your home is very similar to others on the market (in price range, location, condition and style), you will have a harder time selling…..UNLESS lots of buyers are looking for that type of home. By the same logic, if your house is unusual in a “good” way (everybody wants it and properties like it rarely come up) vs. in a “bad” way, (people find it odd or unappealing) you will have more buyers interested. If you do decide to list, be sure your agent’s marketing focuses on its most popular features and any unique/special characteristics that are in demand yet hard to find.
What incentives can you offer a buyer?
Since there are fewer buyers looking for homes right now, you may need to get creative as far as attracting them. Can you offer any particularly appealing benefits? Consider covering a year of HOA fees or offering extra time for inspections or paying for a cleaning service after you settle. Property maintenance is popular too–lawn mowing/leaf collection for a year might be appreciated. Could you provide any flexibility around the settlement date, if that helps the buyer?
COVID is responsible for unprecedented change and uncertainty. Trying to navigate selling your home during this pandemic is challenging, at the very least. There are no clear answers to questions about listing in this current environment, but some level of analysis still possible and worthwhile. Think about health and safety, how appealing your home will be to the smaller buying pool that is currently active, what your competition looks like as far as supply and demand and your own financial position to make the best decision you can.