Evolution of House Showing in 2021

zillow-flex-main photoThings have changed dramatically in our society over the course of the last 13 months, and going forward there is no guarantee that things will return to what we knew as ‘normal’. People changed the way they vacation, socialize, and even the way they work as a result of COVID-19. Between nearly 40 percent of the labor force working from home, and the many month long quarantine, the emphasis on what we get out of our homes is more important than ever. 

That’s why, in spite of the economic volatility of the last year, the housing market has remained relatively stable. Prices are up, buyer confidence is high, and the market is as competitive now as it was pre-pandemic, in some cities it’s even higher.  

Even though people are still interested in buying and selling their homes, the home buying process has changed. Despite real estate being tagged as an essential business early on, gone are the days of prospective buyers taking a Saturday or Sunday morning around town going from open-house to open-house. Additionally, it’s not nearly as easy to get a private showing from a seller unless buyers have the financial means and are beyond just browsing. There’s simply too much person to person contact for that to be a safe method to explore a living space. 

Instead, like many other industries, we’ve seen a sharp rise on the reliance of digital platforms in the exploration stages (for both buyers and sellers). To get a full understanding of how long it takes to buy a house, and the evolution of house showings has taken place over the last year, check out our tips and best practices below. 

 

Whose Market is it?home for sale

Did you know there are specific ranges on the calendar that are more advantageous to buyers and sellers? There is a large seasonal impact on real estate sales, and with the warmer temperatures arriving, that means competition to buy and sell is estimated to increase compared to recent months. In the winter, however, consumers are less willing to subject themselves to the hassle of moving through cold temperatures. So if you have the patience, consider saving over the next several months and striking once the market has chilled. 

But if you can’t bother to wait, or your lease is expiring soon, or you’re relocating due to work, you can still find the home of your dreams this season, you might just be paying a premium. If you compare the residential and commercial real estate markets over the previous year, there’s no doubt that the residential market remained much steadier and continues to hold that pattern even today. 

However, the pandemic slowed and in some markets even halted new builds for several consecutive quarters, leading to a minor shortage of new builds compared to prospective buyers looking to buy their first homes. This decreasing supply compared to high demand leads to the market being much more advantageous for sellers compared to buyers. Competition to buy homes is high, and that means in many cases buyers are bidding against one another, driving prices up. 

However, it’s not all bad news for buyers. The federal government put considerations into COVID/stimulus-related legislation that has been passed, driving down home loan interest rates (in some cases down to zero percent) and providing tax breaks for first-time home buyers. This action leads to more buyers receiving loans with a lower monthly payment. However, these stipulations will not be in place forever, which has also been a driving force that is driving competition up for buyers. 

country neighborhoodBecause there is so much volatility associated with both the domestic and global economy, real estate experts are not aligned on how the residential housing market will pan out for the rest of 2021 and beyond. With a more progressive administration in the White House and a majority in Congress, there is some speculation that more relief is in the pipeline, giving consumers more spending power. With things like student loan forgiveness, new buyers will have more freedom to commit finances towards large assets like homes. 

However, other experts fear that both the commercial and residential real estate market could be a bubble on the verge of popping. Competition is inflating home prices so much that some experts think the value added isn’t sustainable. The rate at which homes are appreciating (even without value being added to the home in the form of renovations or additional square footage) can only keep its pace if more new homes are built or if demand slows. 

Luckily, as COVID vaccines are being distributed at a rapid rate, there is hope that new builds can continue in 2021 and going forward. Ultimately, we would only recommend consumers make the plunge towards buying a home if they feel financially stable and secure in their income. You should have enough saved away that you could pay your mortgage for six months in the event you can no longer work.

 

How Are Agents Showing Homes?drone neighborhood

So now that you have an accurate gauge on what behavior to expect from the housing market, let’s dive into the house showing process and what it looks like in 2021. My parents bought their last home when I was 15, and I remember the process vividly. We’d sort through listings in the local newspaper and online, plot out the open houses, and on the weekends we’d take tour after tour after tour until we found the home of their dreams. 

That process now looks dramatically different. Houses are still listed locally and online, but the forums are completely different. Real estate companies have embraced the power, reach, and scope of online marketing and social media, and are listing many properties on their platforms to get the word out. For local buyers, the most logical first step in the exploration phase would be to follow local real estate firms on social media to gauge what kind of properties are being listed. 

Instead of open houses and weekends full of tours, buyers are now getting to take ‘digital walkthroughs’ where they can get a feel for a property from the comfort of their own home. Instead of touring half a dozen open houses over the course of an afternoon, buyers can now view exponentially more properties digitally to weed out homes that do not check their boxes. Additionally, sellers can cast a significantly wider net from their online platform via virtual showings versus traditional open houses, which might only get a handful of walkthroughs. 

From a seller and selling agent’s perspective, COVID has also eliminated a large share of the explorative or prospective buyers. While private showings are absolutely still a vital part of the buying process, if consumers are taking on the added risk of scheduling private tours, or trying to get more information regarding a specific property, the likelihood that they are acting with intent is much higher these days. Some selling agent’s are even requiring prospective buyers to already be qualified for financing before they will allow them to tour a property. 

Sellers are also taking added precautions of having their homes disinfected after showings, to reduce the risk of transmitting the virus. Most agents are still showing homes, but there are stipulations in place such as requiring masks (and sometimes even gloves), social distancing, and in extreme cases requiring a negative COVID test before meeting with a seller and touring a home.

The incorporation of online marketing gives selling agents an additional opportunity to ‘vet’ potential buyers. The unfortunate truth is that showing real estate properties can, on occasion, be dangerous. So by getting to know potential buyers through social media before a first showing, sellers have that added layer of comfortability and security. With demand being so high, if someone does not pass a realtor’s smell test, they have the luxury to be more choosey in order to reduce risk. 

 

modern-roomPros and Cons of The New Normal

Change is never easy to adjust to, but the reality is that many of the changes associated with the home-buying process is beneficial to both consumers and agents on both sides. The expanded reach of social media and virtual showings allows for better time management for agents and brokers, as well as providing more viewing opportunities for buyers. 

Additionally, when buyers reach the house-touring step of the buying process, they are more likely to know what they are getting into instead of viewing a property that they immediately realize is not a proper fit. 

However, all of the changes are not perfect, and there is some tweaking that is expected to come over the next year. When it comes to virtual showings, it’s more difficult for prospective buyers to ask timely questions related to the properties. It’s also impossible for a buyer to buy a home over a virtual tour, compared to an in-person showing where buyers could fall in-love with a property on-site and immediately move to put an offer in. 

 

Conclusion

Ultimately, the changes that have come from the pandemic are a net positive. There’s less strain being placed on agents, and the impacts of these changes have not had a negative impact on the market as a whole. While there is always going to be fear of inflation and a bubble, it’s not high enough to scare away buyers. As long as buyer’s have confidence in the market and their ability to finance, the market stands to remain in good shape for the foreseeable future.