Real Estate activity in this uncertain time
Every industry in Iowa has been impacted in these recent weeks and real estate is no exception.
The Iowa Association of REALTORS reached out to a few areas of the state to check out real estate activity during March 23-April 3 for a snapshot into how the pandemic is impacting the market.
Understandably, there was a slowdown in activity in the second half of March. The number of open houses lessened and traditional showings began to decline as well.
With that said, the market in Iowa was still quite active these last two weeks. There were over 1,800 property showings in the Cedar Rapids Area MLS. Over 200 properties were sold in Cedar Rapids and there were over 375 new properties placed on the market to sell as reported by the Cedar Rapids Area Association of REALTORS.
In Des Moines, almost 400 properties were sold during this time frame, with another 455 properties in the pending status according to the Des Moines Area Association of REALTORS (DMAAR). These numbers are right in line or above the data in 2019.
March Stats
*Early stats for the entire month of March are showing sold properties in the Cedar Rapids area up a few percentage points.
“Several companies in our market were very busy in March and exceeded their sales from last year. I am very pleased with the way Realtors in our area have adapted to these uncertain times and followed the safety and health guidelines to assist their clients,” stated Marian Flink, President of the Cedar Rapids Area Association of REALTORS®.
In the Iowa City area, early stats show sold properties in March were only down 3.8% in March compared to last year. New properties on the market in March were up 10%.
Total active properties available on the market were 1,077, up 27%, according to Realtors Property Resource.
“Showings are definitely down from last year, but buyers are still looking. Many sellers still need to sell their homes for a variety of reasons and have decided to keep it on the market. Others have elected to wait until conditions improve. We can still help clients buy and sell homes by using disinfectants, masks, respecting social distancing, and following all the guidelines from the government. Agents, lenders, banks are adapting to the new rules using virtual open houses and other technologies like online signatures and transaction management platforms. Everybody is working together in a professional manner to help finish the transactions for their buyers and sellers,” explained Erik Melloy, President of the Iowa City Area Association of REALTORS®.
*Early indications for the Des Moines Area Association of REALTORS® show sold properties up 15% when comparing March 2020 to March 2019.
How are they going about business? Realtors are still advising buyers and sellers on their options. Realtors are utilizing virtual tours and virtual open houses. These virtual open houses are similar to walk-through video presentations with text or narration for interested buyers, as many sellers are choosing to stop holding traditional open houses and are limiting showings of their home.
“Buyer behavior has been altered dramatically. Many buyers are taking advantage of virtual tours and videos online to narrow down their list of properties to just a couple of favorites,” stated Lance Hanson, DMAAR President.
“With interest rates so low, some folks that were already planning to buy are continuing to search for their next home and lock in on those low interest rates,” stated Lance Hanson. “The real estate industry is such an important part of the Iowa economy we are doing our part within the new rules and guidelines to keep Iowa moving forward.”
Looking Back and into the Future
Prior to the pandemic reaching Iowa, Iowa’s pending sales in February were 16% higher than in February 2019. The inventory of homes was up almost 3 percent. The spring months were setting up to be a strong market. In many parts of the state, the number of new construction was higher in February than a year ago. New construction kept rising in Iowa to meet that pent up demand from last fall and winter.
A slowdown in the market is expected, but the true picture of how COVID-19 impacts the real estate market will be more clear once we get through April and see how things progress with the spread of the virus in Iowa.
Many economists feel the pandemic will only slow down or delay some future activity. The expectation that many of the sales will happen later in the summer and fall. This aligns with the national outlook as well.
Note from National Economists
Dr. Lawrence Yun, NAR’s chief economist, “February’s pending sales figures show the housing market had been very healthy prior to the coronavirus-induced shutdown,” said Lawrence Yun, NAR’s chief economist. “Housing, just like most other industries, suffered from the coronavirus crisis, but once this predicament is behind us and the habit of social distancing is respected, I’m encouraged there will be continued home transactions though with more virtual tours, electronic signatures, and external home appraisals,” Yun said. “Many of the home sales that are likely to be missed during the first part of 2020 may simply be pushed into late summer and autumn parts of the year.”
*Stats reflected as of April 3. 2020.
*IAR’s full statistical report for March will be released between April 19-21. Des Moines Area Association will release their March stats between April 9-10.
Sources: Cedar Rapids Area Association of REALTORS®, Des Moines Area Association of REALTORS, Iowa City Area Association of REALTORS®, National Association of REALTORS, Realtor.com, HousingWire.com, REALTOR® Property Resource.
For more information, please contact Mark Gavin, Director of Communications at the Iowa Association of REALTORS® - mark@iowarealtors.com or 515-309-9345