Coronavirus pandemic could end traditional real estate open house model
Phoenix Realtor offers insights to doing business amid COVID-19
As the reality of a “new normal” begins to sink in for many Arizona business leaders --- economists are estimating an 18-month economic recovery period --- no industry is more closely watched than the Phoenix metropolitan housing market.
As difficult memories of the 2008 economic crash linger, local real estate leaders are finding new ways to do old things as one local Realtor, Greg Hague, is moving forward in unchartered waters.
“When things like this happen with any business, you have to look at how you can make adjustments,” Mr. Hague said. “How can you pivot to make these new rules compatible with your own business? Even when businesses start to reopen again, and people are going to be more cautious. What then?”
Mr. Hague offers a snapshot of current housing data for the Phoenix area and opines Arizona Regional Multiple Listings Services data shows a slowdown to the buying and selling of brick and mortar --- but not a screeching halt.
“What I have looked at are sales, based on MLS statistics throughout Maricopa County and I am seeing here that pending sales are off 24% across the board,” Mr. Hague pointed out of the period of time between March 13 and April 13. “That is a very relevant period. Pending sales are off; however, that is almost 6,000 sales that occurred. There was actually an increase in unsold listings.”
Mr. Hague contends data shows active listings increasing from 16,000 to 18,000 single-family residential listings during the March-April snapshot.
“The price per square foot, if you look at homes under $400,000, the average price per square foot stayed about the same,” he explained. “They showed very little negative impact. Over $400,000 is where I am starting to see a drop in square-footage value and sales. The bigger takeaway is prior to this, there was a huge shortage of homes in the $200,000 to $300,000 price range.”
Mr. Hague says if, in fact, Arizona and the United States of America are open for business sometime over the next 30 days --- the housing market will rebound quickly.
“If we can get back to relative normal in May, things will come back very quickly,” he said. “The United States housing market was strong and Arizona’s market was very, very strong.”
Mr. Hague, a Realtor and founder of Hague Partners, late last year announced his program --- 72SOLD --- has become a nationwide endeavor with over 700 Realtors from coast to coast.
But facing the economic impact of the novel coronavirus, Mr. Hague says, takes some innovative approaches to selling real estate.
“The first thing that we have done --- since the second week in March --- is we developed a process where people could see and actually buy homes without physically going through the home,” he said of efforts at Hague Partners.
“The most obvious would be seeing a home by video, which is not new technology it just hasn’t been traditional to see homes you may buy without physically going to them. But we have done it in a way that shows the client tidbits of the neighborhood and surrounding areas. We are very careful to show all aspects of the home.”
The secret to selling real estate during the time of a global pandemic? Mr. Hague says, is all found in the contract.
“We have inserted a clause to all of our contracts that allow clients to not put up earnest money until the post-video walk through,” he said noting the physical walkthrough can adhere to social distancing rules and ensure clients understand what they are purchasing.
“They could cancel before any money would be lost. That combination of video and making buyers comfortable without physically being or seeing a home --- the combination of the two caused us to have a good month in March. That is the magic to where the buyers feel comfortable.”
--- Greg Hague
Mr. Hague says the traditional open house is a thing of the past.
“That is the adjustment we have made with the big takeaways with making the buyer comfortable by not paying earnest money before the post-video walk through,” he said. “It is a socially responsible approach that may end up being the way of the future. It is good for everyone if the housing market is doing good.”