Sam Chaudhry is closing on a $1.2 million house that the buyers have never been to. His clients, a husband and wife with a young child, are moving to Texas from South Carolina. The husband is working from home, and the wife is a physician. Because of the nature of the wife’s job paired with the risk of contracting the coronavirus and getting their child sick, the couple is not touring homes in person. First, they did a buyer consultation on Zoom. Then they had family visit the home and FaceTime them for a virtual showing.
“Buying a home is a very emotional process,” Chaudhry, a real estate broker and managing partner at Remax in Houston, said. “Because when people walk in, they want to see their furniture in there, they want to see where their kids can be, or where they want to be growing their family.”
As the world has adapted to the coronavirus outbreak, the real estate market has shifted. Although it varies state by state, housing prices have not dropped significantly in the way some may have expected, and the future of the market still remains uncertain. While some have lost their jobs and are looking to downsize, others are packing up moving vans and upgrading to larger homes. A recent study from OJO Labs concluded that 80 percent of buyers postponed or stopped their housing search, Forbes reported. The same study showed that buyers are still looking at listing photos and taking virtual tours of properties.
The coronavirus pandemic has left real estate agencies, brokers, and agents at the forefront of a changing market. Vox spoke to Chaudhry, who sells and acts as a rental broker, about his experiences during the pandemic and how real estate is “still on fire” (in a good way). This interview has been edited for clarity and length.
How has your job changed since the coronavirus outbreak?
Because of the coronavirus, we actually ended up going pretty much 100 percent virtual. If we were doing a buyer consultation, we were doing it virtually, because the majority of the sellers were actually at that time also not allowing showings. If we went there, we had to sign the Covid forms, and we would take all precautions with masks and gloves and sanitizers and all the rest of the details.
There was a shock to the system for the whole real estate system, but they actually ended up adapting pretty good.
How do you deal with home showings during a pandemic?
Initially we still had some clients who were flying in from out of town, and any time they wanted to, we had to show the property. We would be taking all of the precautions: We would have face masks on, gloves on, and we will have hand sanitizer and try not to touch the surfaces. We kept a 6- to 7-feet distance between the clients, and we left the door open so they could come and take a look at it, yet we still were 6 to 7 feet apart.
How has the coronavirus affected your business?
One of the first things we actually ended up doing was reaching out to all the clientele and reassuring them that even though this is a temporary setback, everything should be okay, especially for the sellers we were working with. With the buyers, we had a few deals which actually terminated the contracts because of the Covid situation. But we stayed in touch with our clients pretty strongly, and our business is actually up compared to last year at the same time.
What does a typical workday look like for you during the stay-at-home order?
I would come to the office, of course, because we were essential services. We had transactions which were still in the pipeline. I would come in, but instead of more face-to-face meetings, it was Zoom calls, and a lot of phone calls with a lot of previous clients, or new clients we were reaching out to. We would reassure them of the market, and I did inform them that things might be different right now, but if they needed anything we were always a phone call away.
How do you envision the real estate market will change over the course of the next few months?
Real estate is still on fire.
[In May], there was a decline in sales by 3.7 percent in Houston. The reason is that real estate is a lagging indicator. It takes approximately 35 to 50 days for a transaction to come through the pipeline or to show the numbers. So if we’re looking at the month of May, numbers which are negative, that means the months of March and April, all those people who could not go out for the showing or could not go out for the transaction.
One of the biggest things that happened was they drained the inventory [of homes]. A lot of people wanted to show the property ... but didn’t want anybody to come and touch the surfaces. Because they drained the market, it created a shortage of inventory where we are facing multiple offer situations whenever we are submitting the offer. And this is not all over the place, this is very, very patchy at a lot of different price points. Last month, all the price points were negative; it doesn’t matter if you were buying a $50,000 house all the way up to $1 million-plus, all the sales were down.
But we’re anticipating a very solid month of June. Kids and families who want to buy a house, they’re out and about, and because of that it’s creating a very solid market, plus low interest rates.
So you’re saying sales were down last month. Do you think prices will drop or remain the same?
Prices will go up. If there is an incremental spike down, it won’t last long. But remember, every market is gonna be different. The Las Vegas market is a more service-oriented market, which is based on almost 75 percent hotels and casinos. And those people are not going there. So absolutely their prices are going to be affected. But on the other hand, it’s such a diverse real estate market out here in Houston.
What are your clients’ biggest fears and frustrations?
An appraisal which would usually take anywhere from seven to 10 days or so is now taking 14 to 20 days or so. That is becoming one of the challenging things for us.
The other challenging thing — and this is kind of opposite to what you have probably heard — is with the high-end market. Over $750,000 or $500,000 is considered a jumbo market down here in Houston. A lot of banks stopped offering loans above a certain price point, or in jumbo financing, and we had to scramble. I have clients who are moving in from South Carolina right now and in this position, and the two or three banks we ended up going to were not offering jumbo financing.
As things start to reopen, has that changed your business?
My business has changed quite a lot, but we have become more remote and are doing transactions more virtually. So the world has pretty much changed for us.
We are going to have a recession, which is coming. The only thing is a lot of people are not feeling it for the time being because they are getting such huge unemployment benefits. But that is coming to an end in mid-July. We believe that the spike in the market for unemployment is going to rise again. That will make consumer sentiment more negative. We might have some slowdown, but we’ll see.
How do you think this might change the real estate world going forward?
One thing people have recognized is that you can just do a transaction over the computer or over the phone. The process is going to still be the same because buying a house is a very personal thing, and clients still want to be reassured at every step of the way. Especially during pandemic time, good real estate agents become extremely valuable because they can guide and anticipate what can go wrong because of the pandemic. [Clients] still want to be reassured that they’re going to be okay.