A year ago if you were shopping for a new home, chances are you drove around your prospective neighborhood, maybe consulted some listings, and then contacted a Realtor to visit homes in the area. Sometimes a year ago seems like ten. While the rest of the world has changed, the buying and selling of real estate, including homes, has undergone some remarkable changes as well. Amazingly, many potential buyers who never thought they would buy a home sight unseen have done so and the real estate market and Realtors have adapted, even during a pandemic. Both buyers and sellers are affected.
In a blog titled Keeping Current Matters, www.keepingcurrentmatters.com, current conditions are described as follows:
“In a year when we are learning to do so much remotely, homebuying is no exception. From going to work to attending school, grocery shopping, and even seeing our doctors online, digital practices have changed the way we live…
This year, rather than delaying their home purchases, buyers – alongside their trusted real estate professionals – turned to the Internet to do more than just a typical home search. In some cases, they bought homes without even stepping foot inside. Jessica Lautz, Vice President of Demographics and Behavioral Insights at the National Association of Realtors (NAR), says ‘People really didn’t buy houses sight-unseen, traditionally. It’s still not a huge number, but it has gone up, and we have definitely seen that trend accelerate.’”
How much have traditions changed? According to the same article quoting from the National Association of Realtors, one in 20 homebuyers purchased a house sight-unseen. This does not even consider the larger number of potential buyers who consult online resources before initiating their in person searches or contacting a Realtor.
Consider the Commonwealth of Pennsylvania. State Regulations earlier in the COVID-19 pandemic prohibited “walk through” visitations by Realtors with prospective buyers. Pennsylvania was one of the strictest states in regulating real estate activity. Real estate needed to be adapted. In May real estate sales and “related activity” was permitted to resume across Pennsylvania provided guidelines were followed designed to limit infection. At that time, as reported by 6ABC, “the governor’s new guidance…<indicated> people in the real estate industry can get back to work as long as they all wear masks or other facial coverings, and use separate vehicles to drive to visit properties…” In addition according to the same source, “property showings will have to be scheduled at least 30 minutes apart, and food will be prohibited during in-person real estate business activities…” For transactions that can be performed electronically or otherwise remotely, this is the preferred method of handling. New regulations regarding masking, quarantine and testing have since been issued recently in November not specifically dealing with real estate but recognizing recent increases in cases. All of this leads to considering alternatives and one such alternative is using a source we have all come to use more frequently, that is on-line information. Some Realtors have adapted by including “virtual walk throughs,” 360 degree photography and other technologies to make the home more visible to the potential buyer. Some of them report that prospective buyers even prefer this method to the time consumed and long drives involved in visiting properties since it allows them to separate more efficiently those properties that hold their interest from those that do not.
What has been the effect on home sales of the pandemic in Pennsylvania, the real source of the need for virtual visitations? While various sources have indicated varying results, according to nbcphiladelphia.com, Brian X. McCrone, November 29, 2020, “$1 Million Home Sales in Philly Suburbs Soar to Record High Amid Pandemic.” The headline is followed by the statement “It’s a seller’s market as buyers are paying high prices and the inventory is very low, according to a new report from one of the region’s top economists. The surge is fueled by demand for more space amid the coronavirus shut-in.”
According to the article, “not only did $1 million home sales set a record, it smashed the previous record by 50%.” The explanation given is that, with more people spending more time at home, those who can afford it want to move or to improve upon homes. Needless to say this is one unexpected turn from the pandemic.
Esquire, Colliton Law Associates, P.C. Janet Colliton has practiced law for over 38 years, 37 of them in Chester County, Pennsylvania, a suburb of Philadelphia. Her practice, Colliton Law Associates, PC, is limited to elder law, Medicaid, including advice, applications and appeals, and other benefits planning including Veterans benefits, life care and special needs planning, guardianships, retirement, and estate planning and administration.