Has the pandemic caused a real estate panic?
The pandemic has caused a real estate panic. The urban unrest hasn’t helped. Buyers are fleeing urban settings for the suburban life and beyond to rural areas. Some leave Washington State altogether. What they want are larger homes or second homes. This scenario plays out across the country.
“Anything right outside of Boston is going like wildfire, but especially the single-family homes. I’ve never seen bidding wars – I mean, you know, randomly here or there – but I’ve never seen bidding wars with consistency in the fall like I have this fall.”
“Consumers working from home or schooling from home want more square footage since the home is more than just a home now, it’s a daycare, an office, a gym and a school. Pool permits in Frisco, a Dallas suburb, have gone up 400%.”
“People have been working this whole time at home, and they’re looking for bigger homes with maybe a little more land. So, they’re moving away from the downtown area. The suburbs are really getting busy. Some homes are bought sight-unseen.”
The complete quotes, cited above and edited only for brevity, can be found in this article from HousingWire.
The pandemic-driven real estate panic is real
So what drives homebuyers these days? Some are looking for a second home as a place of refuge. Ideally, it is a home that’s less than a two-hour drive away from the urban or suburban home. It’s meant to be a get-away where they can spend the weekend or an entire week. Preferably, the second home is large enough to bring friends or colleagues along. Mom may leave the primary residence with her children and some school mates and with another parent to spend a couple of weeks. Virtual school can be anywhere. So can be the virtual office, as long as there is the internet.
Other homebuyers are finding out that their homes are too small for all the occupants to spend the waking hours together. There is not enough privacy to attend school virtually or “zoom” a business meeting. The great room concept has lost its appeal. Now, homebuyers are looking for homes with enough rooms where everyone can shut the door and be alone.
The byproduct: mostly low inventory
The urgency of these homebuyers is often met with a dearth of homes on the market. Low inventory has plagued the Seattle area housing market for months and that’s not going to change. The election a few days away hasn’t helped.
For example, when comparing single-family home inventory for September 2020 with September 2019, Kirkland’s 98034 zip code is down 57.1 percent, Bothell (98011) down 72.3, West Bellevue (98004) down 50.5, Redmond (98052) down 45.8, Woodinville down 64.7, and Mill Creek (98012) down 68.8 percent. In Camano Island, where I have done a fair amount of business, inventory is down 56.3%.
In contrast, the inventory of single-family homes in the Capitol Hill/Eastlake (98102) area is up 68.4% and the condo inventory for Lake Union (98109) is up 79.2%. The only reasonable explanation for this real estate panic induced statistic is the civil unrest.
“Buyer beware” still applies
In low inventory areas, this has resulted in rising prices and multiple offers. Buyers are taking risks by buying homes without inspections. Sellers know this and some of the real estate would not be on the market if there was enough inventory. The age-old adage “buyer beware” still applies.
The real estate panic has not hurt me.
Personally speaking, I can’t remember when I was this busy this time of year. 2020 has already been the best year in my 18-year real estate career. The real estate panic has not hurt my business.