The Coronavirus outbreak is one of those rare events that have the potential to change the trajectory of the economy on a global scale and with it, the trajectory of our lives. In true black swan fashion, the event came as an (almost) total surprise and has already had a major effect on many aspects of life, starting from the more mundane social relations to the more vulnerable work and economic relations.
With social distancing and home isolation being the first important changes, at Point2 Homes we wanted to analyze the ripples of these shifts on the real estate market, but mostly their effect on homebuyers’ confidence and the changes they are prepared to make to adapt to the current situation.
To gauge homebuyers’ reaction to the outbreak and to see how they feel about the homebuying process and the current changes, we conducted a flash survey of 2,900 visitors that are searching for properties on Point2 Homes, one of the largest real estate marketplaces in North America. We asked about their short-term and long-term buying intentions, about the challenges they are encountering and also about the changes they plan to make. The survey is ongoing, and we will continue to post updates on the evolution of homebuyers’ changing attitudes toward the real estate market.
Despite the present conditions, American homebuyers are mostly still interested in acquiring property, keeping an eye on the market. Moreover, those who are actively searching stated that they will focus more on online pictures and virtual tours as a safety precaution, but they do not plan to stop their search for the dream home.
Although 35% of prospective homebuyers stated that they are no longer actively searching for properties, and just keeping an eye on the market and maybe waiting for the period of uncertainty to end, 19% are determined to buy as soon as they find the right home. 22% of home seekers, however, have definitely stopped trying to find a property, citing the outbreak as the main reason for putting everything on hold.
When asked about their homebuying plans, no less than 34% said they are determined to buy in the next six months, while a further 25% intend to do that in the next year. Only 12% are planning to extend their buying time frame, stating they might be ready to buy only in the next five years or in the more distant future.
Many survey takers are still not concerned about buying or selling property. Whether it is because they have put the whole process on hold or because they are taking extensive safety precautions, the majority of respondents (41%) stated that they have no major concerns about the buying process these days.
However, the next most signifiant category of respondents, which probably includes people who very recently bought a home or are currently in the process of finalizing a transaction, mentioned financial-related stress: 31% worry about their financial situation and whether or not they will have the financial stability to afford the mortgage. 12% cited a variety issues, worrying about the number of homes that will actually be available, while only 16% cited health and safety concerns as their main issues regarding homebuying in this period.
If 27% of prospective homebuyers stated that they have already started looking for cheaper properties, 42% of respondents said they haven’t noticed any significant changes in their homebuying process. There is another category of home seekers who did see their preferences change during the outbreak: 19% of survey takers admitted to bracing for major delays and a general slowdown, no matter where they are in the homebuying process.
This outbreak will no doubt bring some permanent changes to the market. Although the need for social distancing has brought about the need for more of the process to be conducted online or over the phone, there will probably be some other changes in the process as well.
When asked about the changes and precautions that they themselves started taking due to the spread of the virus, 44% of respondents reported that they are currently focusing more on the online tools at their disposal: property pictures and descriptions and virtual tours. Another 5% plan to rely more heavily on their real estate agent, but 35% don’t plan on making any changes.
When aggregating the results and breaking down the answers based on age, some interesting facts emerged. The 45-54 age group are the most optimistic about buying: more than half of the respondents in this age bracket, or 55%, stated that they are still looking to buy a home despite the outbreak. In fact, younger buyers have higher levels of optimism and confidence, with around half of all people under the age of 55 still looking forward to buying. Meanwhile, people over 65 are the most reluctant, with 27% of them stating that they have seized all actions related to buying a new property.
Up until the first analysis of the answers, homebuyers and home seekers all over the U.S. remained fairly positive about the process. Whether they are wrapping up some negotiations and transactions that started before the outbreak, or they do not want homebuying to drop too low on their list of priorities, the reality at the moment is that many Americans are keeping their eye on the market, or are even actively searching for properties online. However, at the current pace of change, it remains to be seen how many will succeed and how many will put their plans on hold for the time being.
The 5-question survey was posted on the Point2 Homes website between March 23rd and 26th. There were 2900 usable answers. All percentages were rounded.
Fair use and redistribution
We encourage you and freely grant you permission to reuse, host, or repost the story in this article. When doing so, we only ask that you kindly attribute the authors by linking to Point2Homes.com or this page, so that your readers can learn more about this project, the research behind it and its methodology.