In March, the isolation and containment measures set in place to fight the coronavirus pandemic forced the majority of homebuyers to rethink their entire approach to house hunting and buying property.
Preoccupation with real estate took a backseat to more urgent matters, leading to a significant drop in traffic and activity on the Point2 Homes platform, but also to a dramatic shift in Google searches and trends. However, homebuyers’ confidence remained high despite deteriorating economic conditions.
Now, after almost two months of uncertainty and negative trends, homebuyers want to remain positive. But, that attitude is becoming increasingly hard to maintain. Although searches for homes for sale are back up and even surpassing pre-pandemic levels — meaning home seekers are active online and eager to resume their activity on the real estate market — the current economic and social conditions might prevent them from doing so.
To see how homebuyers’ attitude is evolving and how the changes in their behavior are influencing the buying and selling processes, we have kept a finger on the market’s pulse with the traffic reports and homebuyer survey initiated after the first containment measures. Here are the updates:
Buyers’ Renewed Interest Pushes Traffic Back Up
Home searches have really picked up after the free fall from the first half of March. Comparing data from the day with the absolute lowest number of visits (on March 20th) and the day with the highest number of home searches so far (May 9th), traffic shot up 125%.
Certainly, the homebuying process has been slowed considerably, and many people have put everything on hold indefinitely. But, the recent increase in online activity may suggest that prospective buyers are paying close attention to price changes and the number of properties on the market. Due to this increase in interest, visits on the platform are up 55% year-over-year, which brings the numbers back in line with seasonal trends and the site’s previous growth trajectory.
Previously, after a 19% drop in the third week of March, traffic to the site went up briefly, only to plummet once again — fluctuations that were likely due to the upheaval and climate of uncertainty caused by the crisis. However, beginning in the first week of April, homebuyers reverted their attention back to the search process. Since then, traffic has been growing steadily on the Point2 platform.
Likewise, per Google Trends data, overall real estate-related searches followed the same path. After the initial drop, searches for terms like “house for sale,” “house with garden” or “cheap homes” are spiking again.
In the meantime, like many other economic sectors, the industry has been operating at diminished capacity. In fact, according to our real estate professionals survey, nearly eight in 10 agents noticed a massive drop in homebuyer interest — or, at the very least, a decline in the decision to act on it. However, homebuyers are starting to realize that keeping a finger on the pulse of the real estate market is a must. Regardless of their purchasing intentions and timeframe for buying a home, home seekers want to be in the know.
Buyers Active Online, but Forced to Wait in Real Life
These new trends and changes in homebuyers’ online behavior show that consumers might be ready to hit the ground running — once they are allowed to leave their homes and resume their activity as buyers.
Meanwhile, the economic uncertainty and home seekers’ inability to buy their dream home has allowed some pessimism to seep in. So, to gauge the difference in attitude from week to week, we analyzed survey data each Monday to discover buyers’ states of mind as they begin a new week.
We found that the percentage of people who want to hold on to their homebuying plans dropped from 40% on the first Monday of the survey to 32% on April 27. Conversely, the percentage of people who completely gave up the idea of buying reached 35% — up from 26% just a few weeks prior.
Similarly, the percentage of motivated homebuyers who said they were determined to buy in the next six months was also down, from 34% to 31%. However, this was not as drastic of a change, which may suggest that those who want to move into a new home by the end of this year still have the confidence that they will be able to do so.
This level of optimism seems to be in line with the attitude of many consumers and workers who, according to latest issue of the NFIB Small Business Economic Trends, believe that the economy is taking a turn for the worse, but only for the short term — they expect that the economy will improve in the next six months. And, despite current conditions, most people — whether they’re prospective homebuyers, consumers or unemployed workers —want to believe that everything will improve sooner rather than later.
Even Confident Buyers Worried about Financial Stability
Joseph Brusuelas, chief economist at consulting firm RSM, told Axios that “consumer confidence is signaling a bit of cognitive dissonance right now, [as] people want to believe that their portfolios will recover in one calendar year.”
This desire to remain optimistic in the face of adversity is what motivates people, in general — and prospective homebuyers, in particular — to hold on to their pre-pandemic plans. Consequently, of those who still want to buy a home within the next six months — and who had probably already begun the process or are determined not to wait this out — how many are concerned about their future financial situation? And, how many have safety concerns or worry about not having enough properties to choose from?
When analyzing the main pain points of these respondents, it became apparent that financial uncertainty loomed large for 35%, up from 32% a few weeks ago. Alternatively, the percentage of respondents who were not concerned and did not believe that they would encounter issues held firm at 33%.
At the same time, the more determined homebuyers are either planning to look for less-expensive homes (the percentage of buyers interested in more affordable properties increased from 37% to 40%), or to go on without making any changes at all. And, for those who were further along in the process, the relaxation of containment measures might be all they need to finalize closings. The percentage of respondents who said they would make no change went from 34% to 36% in a few weeks.
Despite the real estate market’s great start and incredible momentum going into 2020, the industry took a massive hit as the pandemic began wreaking havoc. Homebuyer interest in homes for sale and real estate, in general, plummeted, and was replaced overnight by an almost singular interest on the new virus and the measures needed to contain it. Fortunately, new data suggests that the tide might be turning — but only when it comes to homebuyers’ interest and hope that the market is recovering.
- Data for the evolution of traffic was sourced from www.point2homes.com.
- The survey for homebuyers included five multiple-choice and rating questions and was available to prospective homebuyers between March 23 and April 29, 2020.
- A total of 23,818 prospective homebuyers answered all the survey questions and provided valid answers.
- This survey was anonymous; all data was aggregated for the final results.
- All percentages were rounded. As a result, percentages presented for each question in this report may not add up to exactly 100%.
- Previous traffic reports and surveys: March Traffic Report, Homebuyer Sentiment Survey, Real Estate Agent Sentiment Survey.
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