The Impact of Coronavirus on North Carolina Real Estate

An aerial view of three rows of suburban homes.

As we begin to shift into a new “normal,” the real estate industry is adjusting to life in the midst of the COVID-19 pandemic. Social distancing and stay-at-home orders have caused businesses to change their operations to ensure safety and healthy practices. The North Carolina real estate industry has followed suit.

While things are changing, there’s no need to panic. This is a resilient industry that’s gone through many recessions and always manages to come out on top. Here are some answers to the questions we’re hearing most often from our real estate clients:

How Do You Sell Homes in a Pandemic?

In an age of social distancing, virtual tours are the new norm for real estate agents. Many agents across the state are finding new and creative ways to show potential home buyers their listings without any travel necessary.

Just getting started? Here are a few tips for pulling off a great virtual tour:

  • Get the home ready like you would for any other show: open all the windows, turn on all the lights, and make the home look as bright and aesthetically pleasing as possible.
  • Try not to zoom in at any point because this distorts the view and creates confusion for the viewer. Similarly, if you’re going to show off the entire house, be sure you’re far enough away from it so that you capture the entire home in the frame.
  • Make sure to choose the right time of day. While noon has the most sunlight, it can wash out the home’s features. Shoot the virtual tour at sundown, as this has the most flattering light.

In addition to the traditional virtual tour walkthrough, consider trying out a 3D or virtual reality tour. These give the buyer the freedom to click through the home and navigate it at their own pace—as if they were there in person.

Are Home Prices Changing?

Recent data shows that home prices are going down as sellers begin to lose confidence in the real estate market. In early April, the median listing price for a home in the United States was $309,000—nearly $21,000 lower than two weeks before.

Are Sellers Delisting Their Homes?

Some sellers have opted to delist their homes because of the coronavirus. In the last week of March, there was a 184% year-over-year increase in delistings—a total of 28,140 homes across the country.

Is Now a Bad Time to Buy a Home?

No, while supply may be temporarily down, that doesn’t necessarily make it a bad time to buy a home. It’s difficult to time the market when it comes to any serious investment—including real estate—which is why most experts say you shouldn’t.

The truth of the matter is: people still need to buy homes. There are a wide variety of reasons to buy a home, and those reasons won’t go away just because there’s a pandemic. Buyers can still find their dream home, at the right price and in the right location, at the time. The main thing that’s going to change is the process of getting it done.

What’s Going on with Mortgage Loans?

According to the Mortgage Bankers Association’s seasonally adjusted index, mortgage applications dropped 33% year over year. While North Carolina has not been hit as hard by the coronavirus as other states, mortgage applications are expected to decrease in volume as interest rates creep upwards.

In fact, the average contract interest rate for a 30-year fixed rate mortgage rose in March from 3.84 to 3.87. It may become more difficult to obtain a new home loan across the country. Many lenders are adding stricter underwriting to their loans and some refinance applications are being dropped as applicants lose employment or income.

In addition, it was revealed in the Mortgage Bankers Association survey that 7% of existing mortgage loans are now in forbearance. Many banks and lenders are offering homeowners different relief programs related to the COVID-19 pandemic.

How is the Mortgage Process Changing?

Some lenders are beginning to require higher credit scores for mortgage applicants. Additionally, minimum down payments are increasing and a few lenders are stopping the issuance of loans altogether.

That just means buyers need to be more diligent in shopping around for different lenders and getting pre-approved for a mortgage application before looking for a home.

How Can I Stay On Top of What’s Going On?

With rules and regulations seeming to change every day, it can be challenging to stay on top of everything that’s happening in the real estate industry right now. Some easy ways to stay updated, while avoiding the “information overload” that some are experiencing, is to subscribe to local blogs like ours. NC Realtors has a Coronavirus Information page that they update regularly with resources, guides, and other information useful to anyone involved in the real estate industry.

Have a specific question about your title insurance at this time? Don’t hesitate to reach out to Tryon Title. We’re here to help you and your clients as you navigate buying, selling, and investing in North Carolina real estate during coronavirus.