A new survey by the National Association of Realtors (NAR) revealed that the majority of realtors believe buyers and sellers will return to the market at the conclusion of the COVID-19 pandemic.
NAR states that nearly six of 10 members (59%) said buyers are delaying home purchases for a couple of months. Fifty-seven percent said sellers are delaying home sales for a couple of months.
"Home sales will decline this spring season because of unique economic and social consequences resulting from the coronavirus outbreak, but much of the activity looks to reappear later in the year," said NAR Chief Economist Lawrence Yun. "Home prices will remain stable because of a pandemic-induced reduction in inventory coupled with less immediate concerns over foreclosures."
Fannie Mae’s latest Home Purchase Sentiment Index (HPSI) dropped 11.7 points in March to 80.8—the lowest reading since December 2016.
Five of the six HPSI components declined month-over-month, including the number of consumers concerned about losing their job over the next year. Fannie Mae also says consumers also reported homebuying and selling conditions have worsened and they have a “more pessimistic” view of home-price growth.
The HPSI is down 9 points year-over-year.
Doug Duncan, SVP and Chief Economist at Fannie Mae, said attitudes about the current home-selling environment have “deteriorated” and have fallen to their lowest level since January 2017.
The NAR survey also found that due to COVID-19, 90% of NAR members said buyers' interest declined and 80% of members cited a decline in the number of homes on the market.
Also, 72% of members said sellers have not reduced prices to attract buyers and six in 10 members said buyers are expecting a decline in home prices as buyers “senseless competition in the current environment.”
The survey also found that technology is playing a vital role as the real estate industry adapts to the current social distancing directives.
“Members said the most common technology tools used to interact with clients are e-signatures, social media, messaging apps, and virtual tours,” the survey said.