What a difference a week makes.
As late as last week, the mounting number of coronavirus cases in King County seemed to be having a negligible affect on the housing market. The “spring frenzy” predicted by brokers earlier this year was in full swing — and even if not quite as frenzied as some had hoped, buyers were still crowding into open houses by the hundreds.
But uncertainty — over the stock market meltdown, the timeline for the pandemic to run its course and rising mortgage rates, to name just a few factors — has started to creep in to the housing market.
Interest in homebuying nationwide has contracted sharply in recent days, according to new data from the National Association of Realtors. Nearly half of the agents it surveyed said homebuyer interest has decreased due to the coronavirus outbreak, up from 16% the previous week.
Seattle-based brokerage Redfin, citing market uncertainty, announced Wednesday in an SEC filing that its home-flipping division would temporarily stop buying new homes.
“With whole cities shutting down nearly all commerce, no one can say what a fair price is right now, so we’re not making any instant offers,” said CEO Glen Kelman in a statement.
Redfin data also suggests home-buying market trends may hit Seattle sooner than other parts of the country.
Last week, a Redfin survey found that 38% of its Seattle agents have clients who are “concerned” about the coronavirus and “are more reluctant to buy or sell,” compared to 16% of agents nationwide.
The same survey, however, also showed that 34% of Seattle agents have clients who are “hopeful that the coronavirus will make other people reluctant to buy or sell, easing some competition on the market,” compared to 13% of agents nationwide.
It’s still too early to chart noticeable differences in home-buying activity around Seattle. But other market trends that are typically correlated with real estate sales suggest contraction may be in the cards.
Share prices have fallen so quickly in the past two weeks that analysts predict the advances following the November 2016 election — the so-called “Trump bump” — will soon be wiped out. The Dow Jones Industrial Average and S&P 500 have lost about 30% since they peaked in mid-February.
Meanwhile, mortgage rates climbed this week after hitting all-time lows two weeks ago, spurred in part by an upsurge in refinances.