COVID-19’s impact on residential Real Estate in Dane County
Are you curious about how COVID-19 has impacted our local real estate market and industry? The data is in!
Before Safer at Home
2020 started very strong before the pandemic, and we began to see a lot of activity in the early part of the year. The combined total of accepted offers and closings between January and February exceeded 2019 by 3% and 1%, respectively. New listings were also up 3%, and we appeared to be on track for a healthy spring market ahead.
During Safer at Home
Since March 25th, when the safer at home orders went into place, new listing inventory in our area decreased dramatically from where it was a year ago. We were already working with scarce inventory levels before the pandemic hit. In the wake of the situation, this became more pronounced as home sellers were hesitant to put their properties on the market and open their doors to strangers. Currently, there are only about 1.5 months of inventory on the market. Interest rates have also dropped to exceptional lows, making it enticing for buyers to purchase. This gap between supply and demand led to an increase in the average sale price, list vs. sale ratio, and sold $/SqFt.
Post Safer at Home – Our Predictions
So what do we anticipate will happen now that the safer at home restrictions have expired and we begin to reopen our state? We predict to see a spike in listing inventory and an increase in buyer activity/competition from people that have been putting things on hold for a while. This spike will be similar to what we would have seen in the spring. There may be fewer buyers in the market as some tenants who would have purchased may have opted to re-sign leases and put things on hold for the year. A local property management company stated that their tenant retention rate more than doubled versus 2019.
Additional Trends to Watch
COVID-19 has affected our markets and industries in a lot of different ways and the real estate industry is no exception. Consumer fear and safety concerns will remain high as more buyers and sellers begin to enter the market once again. A few trends that we will continue to see in the industry:
- Buyers, sellers & real estate professionals will continue to rely heavily on the internet, technology, and virtual tours. As a seller, it will be essential to maintain excellent exposure online.
- Limiting the number of individuals in a property at the same time will continue to remain a priority. As a result, open houses will still be rare/non-existent for a while, and agents/sellers will restrict overlapping showing appointments. You may need to be flexible in your showing schedule to see a property in person.
- You will continue to see very particular showing instructions requiring visitors to use wipes/sanitizers and wear masks/gloves during tours.
- Inventory will remain tight, as sellers may continue to hesitate on listing their properties and allowing others to enter their homes.
- Buyers and real estate agents will not attend events that may have before COVID-19, such tests as inspections, to limit contact and exposure.
- Closings will become more remote, with a limited number of attendees and a push towards online notarization and “drive-through” closings.
- More Buyers and Sellers will rely on the expert advice, guidance, and support of real estate professionals in navigating a market that presents a lot of unknowns.
If you are considering a purchase or sale in the coming months, we invite you to reach out to us at The Hub Realty by phone (608) 336-3500 or email at email@example.com to discuss the market and the best plan to reach your real estate goals.