How one country’s housing market is reacting to the virus

The extraordinary past week of anger over portals’ fees plus early-warning statements like that from Foxtons indicate the anxiety in the industry as Coronavirus shuts down activity.

What’s been missing, so far, has been any authoritative national snapshot of what sellers may be thinking, and of the transaction slump’s effect on prices - if any.

Regular reports from Rightmove, the Royal institution of Chartered Surveyors and from the website Home have all been badly timed, giving rather cheerful snapshots of the market in the weeks before the virus hit the UK with a vengeance; the upbeat press releases from this trio contrasted with sometimes-devastating virus news from the government.

We will, probably within the next two weeks, get some more meaningful analysis of the fall off in transactions caused by the virus - but in the United States there has already been substantial research into the early effects.

The data should be read in the light of some obvious health warnings (if that’s not too indelicate a term right now).

Firstly, this is the US and not the UK; secondly, the home selling process there is very different to over here; and thirdly, measures to suppress the virus in some parts (but not all) of the US have been less oppressive to activities like putting a home on the market.

With all that in mind, this is what the highly influential US trade body the National Association of Realtors found in a study undertaken on March 16 and 17.

Some 48 per cent of realtors said home buyer interest had decreased over the previous week; this was a tripling from the 16 per cent figure recorded by the NAR in a similar study seven days earlier.

However, and less pessimistically, 69 per cent of realtors said there had been no change in the number of homes on the market in the past seven days; this was again down from the previous survey’s figure of 87 per cent, but was a much smaller drop than many may have expected given the blanket media coverage of the Coronavirus crisis.

Most interesting of all, perhaps, is the analysis made by the NAR’s chief economist, Lawrence Yun. he says: “With fewer listings in what’s already a housing shortage environment, home prices are likely to hold steady. The temporary softening of the real estate market will likely be followed by a strong rebound once the economic ‘quarantine’ is lifted, and it’s critical that supply is sufficient to meet pent-up demand.”

Other responses from the survey included;

45 per cent of NAR members said the stock market correction and lower mortgage rates roughly balanced out, noting no significant change in buyer behaviour;

the majority of members, 61 per cent, reported no change in sellers removing homes from the market, down from 81 per cent a week earlier;

40 per cent of members said home sellers have not changed how their home is viewed while it remains on the market. One week earlier 77 per cent said the same.

This ‘proves’ nothing at all, of course, but my take is that the response from the US sellers has been less dramatic than I anticipated.

This isn’t to be complacent because of course agencies’ futures are at stake and even this drop in sentiment is very bad news - but it’s perhaps not as bad as it might have been.

We’re in a position where we’re having to seek out every crumb of comfort right now, and this is one, no matter how minimal.

Stay safe, everyone.

*Editor of Estate Agent Today and Letting Agent Today, Graham can be found tweeting about all things property at @PropertyJourn