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But the real estate market slowdown and growing economic fear during the coronavirus crisis are evident in declining home showings, withdrawn listings and deals falling through at closing after buyers suddenly lost their jobs, according to local real estate agents.
“We’ve had two transactions fall off because the buyer got laid off. It’s just awful,” said Lisa Terry, co-owner of Home Services Title in Beavercreek. “There is a ripple effect. If that buyer is unable to buy the house the seller may already be under contract to buy another house. That creates a hardship because they own two homes instead of one.”
In the past two weeks 10 million people nationwide, including 468,414 Ohioans, filed for unemployment benefits. Greene, Miami and Preble counties have had some of the largest increases in jobless claims in the state, according to an analysis of the most recent data by Policy Matters Ohio.
RELATED: Coronavirus: Jobless claims skyrocket; Ohio and counties among hardest hit
Regardless of the economic climate, some people need to sell or buy because of their specific circumstances, but others may be deterred from signing a new mortgage out of fear they will lose their jobs, said Heather Zimmaro, a real estate agent at Coldwell Banker Heritage.
“I think it’s something on people’s minds,” Zimmaro said. “Yes, our market has changed but I really think this is more of a pause than an imploding. I think we’re going to be ok on the other side of this.”
Showings of homes plunge
March home sales numbers are not yet available, but home showings have plummeted, according to data collected by ShowingTime.com, which tracks real estate showings scheduled in the Dayton Multiple Listing Service (MLS) covering Montgomery, Greene, Preble and Darke and northern Warren counties.
Last year there was a steady climb in the rolling weekly average number of showings from January through April 2. But this year, beginning on March 11, two days after Ohio Gov. Mike DeWine declared a state of emergency, the numbers began a steep plunge that hasn’t abated.
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On that date the weekly rolling average had increased 27.4 percent from the prior week, about half of what it had been on March 11, 2019, according to ShowingTime.com. On April 2 the rolling weekly average declined 24.7 percent from the week before. By comparison on April 2, 2019 the rolling average had increased by 64.5 percent in the Dayton MLS.
“Through mid-March, year-over-year showing activity was higher nationwide compared to 2019. The current downturn is indicative of the industry’s response to COVID-19, which is changing daily,” according the ShowingTime.com news release.
COVID-19 is the illness caused by the novel coronavirus that is spreading throughout the world.
In the Dayton region, single-family home and condo sales were up 7.07 percent and the average residential home sale price was up 12.81 percent in January and February compared to the same period in 2019, according to Dayton Realtors’ data from the Dayton MLS.
RELATED: In spring 2019 houses went fast in booming Dayton housing market
Frye said she has seen home mortgage rates as low as 3.725 this past week and while people are still getting conventional loans she is seeing a “massive slowdown” in FHA lending because fewer companies are buying those securities.
Anjanette Frye, president of RCF Properties Inc. in Centerville and past president of Ohio Realtors (2019)
On Friday Bankrate.com showed an average mortgage rate in Ohio as low as 3.05 percent on a 15-year fixed rate.
“I suspect rates are going to come down a little more here,” said J.T. Thurston, vice president of communications for the Ohio Bankers League.
Lenders are reporting a statewide slowdown in home mortgage applications, although near rock-bottom interest rates are driving continued interest in mortgage refinancing, Thurston said.
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“All of the banks are bending over backwards to help customers right now. They are waiving fees, extending terms, allowing customers to go interest only for a period of time until they get back on their feet,” Thurston said. “The banks are very cognizant that these are good customers that the banks want to help as much as they can.”
Thurston said banks are willing to work with potential buyers whose home loans fell through because they suddenly lost a job, as well as with customers who already have a mortgage and lose jobs.
“It is important to contact your bank as soon as you can if you do get into difficulties,” Thurston said. “Your bank is going to be able to help you in a lot of ways that you didn’t think possible.”
Danger of infection changes processes
Real estate sales are considered an essential business, so they are not subject to Ohio's stay-at-home order. But agents and title offices are putting in place multiple procedures and processes to minimize the danger of infection.
Agents are also doing as much online as possible, including offering virtual tours of property and limiting contact with people.
“The problem with that is real estate is such an emotional game, unless I see them face to face I cannot buy their trust,” Reddy said. “You cannot buy it on the phone. You cannot buy it on video. There’s got to be some interaction between the people.”
The National Association of Realtors put out a Transaction Guide and an Open House Guide that Dayton Realtors shared with its 3,000 members.
The guidance strongly discourages holding open houses and notes that a recent national survey found a large percentage of real estate agents had suspended all open houses.
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When a buyer wants to physically see a house the guidance suggests a variety of safety practices including hand washing, sanitizing all surfaces before and after and staying six-feet apart. If a seller needs to be home during a showing Reddy asks them to sit in the car in the garage or take a walk so that there is no contact between buyer and seller. He cleans before and after a showing.
“I wipe down lock boxes before I open them, I go inside and wipe all door handles, leave all doors open and run a clean sweep on kitchen counters,” said Reddy. “And my instruction to the buyers is, ‘We don’t shake hands anymore. We don’t even elbow bump anymore because we are six feet away. We just wave from a distance.’”
He said sales contracts can now have a “coronavirus addendum” that allows sellers to withdraw a listing and allows a seller to walk away from the deal without losing earnest money if the buyer cannot accommodate the seller because of the crisis.
Closing a real estate transaction has typically involved putting buyers, sellers, real estate agents and title office staff around a table and a lot of signing of documents. With a highly infectious virus circulating that is no longer possible.
RELATED: Experts: Nursing home cases a sign of how infectious coronavirus is
Now buyers and sellers sign separately, with each group entering the room separately and title office staff sanitizing and replacing all pens in between.
“Some companies are actually doing curbside closings,” Terry said. “We have not resorted to that at this point.”
Lisa Terry, co-owner Home Services Title of Beavercreek
While most of the closing process can be handled electronically, she said the electronic signing of the actual titles is still limited by lender preference and lack of electronic title filing in more than half of Ohio’s counties, including Montgomery County.
With county offices closed to the public, title company employees cannot personally handle recording the title documents after closing, said Terry. Instead they must be dropped off at county buildings, where title documents first go to the auditor’s office which handles the deed transfer and then to the recorder’s office to be officially recorded.
Montgomery County Recorder Brandon McClain and Mike Brill, communications and community engagement manager for Montgomery County Auditor Karl Keith, both said documents are being handled as soon as they come in and the process has not slowed even though title company employees are no longer allowed to come into their offices.
McClain said larger counties have been slower to adopt electronic filing because of the sheer number of parcels in those counties, but his plan for a spring 2020 roll out of electronic recording for non-transferable documents like mortgages, assignments and releases has been delayed by the coronavirus crisis to late summer. He said electronic recording of titles will take even longer to implement.
Zimmaro said the technological changes brought to the real estate industry by the coronavirus crisis are likely to stay as buyers, sellers and agents become more comfortable with real estate technology.
“We’ve had this amazing technology already and now we are really able to sharpen our skills with it. The community and our clients are embracing it more,” Zimmaro said. “We’ll be changed forever because of this. I think its pretty amazing to watch our industry being able to pivot when it comes to situations like this.”
Dayton Region home sales before the coronavirus crisis
January and February 2020 compared to same period in 2019
New listings: 2,794, up 8.25 percent
Sold: 1,938, up 7.07 percent
Median sale price: $145,000, up 11.58 percent
Average sale price: $172,389, up 12.81 percent
Total sales price: $334.1 million, up 20.78 percent
Source: Dayton Realtors for Montgomery, Greene, Preble and Darke, and northern Warren counties.
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