Coronavirus delays Philadelphia's busy spring housing market
Marlin and Anne Kinzey, parents of adult children, want to sell their home of 25 years in Washington Square West and downsize to live in their Brooklyn co-op.
They planned to show the townhouse at the start of the spring buying season. But "things kind of went awry," Marlin Kinzey said.
The coronavirus pandemic interrupted a bustling Philadelphia real estate market and halted in-person open houses and showings. The Kinzeys decided to delay listing and ride out the crisis at their home with attached courtyard. They don't anticipate selling the house and moving until fall at the earliest.
"This just isn't the right time to do it," Kinzey said.
Nationwide, roughly six in 10 Realtors say homebuyers are delaying for a couple of months, and almost the same percentage -- 57% -- say the same about home sellers, according to a National Association of Realtors survey of about 5,900 members last week.
Across the country, new listings usually grow by 50% from March 1 to early April, according to data Zillow released last week. But this year, the number of new listings is down nearly 20% over that period.
In the Philadelphia metropolitan area, new listings are down almost 43% from March 1 to April 5, when the number of new listings typically grows by roughly 52%, according to Zillow.
Before the pandemic hit, the year was off to a great start for real estate, thanks to a mild winter and low mortgage interest rates, agents in the region said. Median home prices and the number of closed sales were up last month compared to the same time last year, according to Bright MLS. Buyers scooped up homes in the Philadelphia area faster than in any other March in 10 years, according to the listing service.
Even during the pandemic, some houses in popular areas at the right prices are selling in a few days with buyers seeing the homes virtually.
The pandemic "certainly hit at the worst time for the real estate market," said Jamie Ridge, president of the Suburban Realtors Alliance, based in Chester County. The National Association of Realtors predicted the number of home sales would decline this season because of the "unique economic and social consequences" of the pandemic. Although the association's survey shows many buyers expect home prices to drop because of the crisis, the group said prices "will remain stable" because of lack of inventory and a halt in foreclosures.
Real estate agents nationally and regionally predict activity will pick back up after shutdown orders end, and the busy season will shift to the summer or fall.
Philadelphia Realtor Jamie McFadden is seeing many sellers listing their properties "coming soon," so they can build interest before homes officially go on the market. Multiple listing services are relaxing time limits on this status during the pandemic.
The number of those listings "gives me hope there are sellers out there that want to list," because "a ton" of buyers want to take advantage of low interest rates, said McFadden of Team Whetzel at Kurfiss Sotheby's International Realty.
William Festa, president of the Pennsylvania Association of Realtors, said that not being able to have in-person open houses and showings has been difficult. "Consequently, the market has slowed down," he said.
Once governments relax stay-at-home orders, buyers and sellers will likely wade into the market, rather than jump in right away, he said.
Gov. Tom Wolf's administration denied requests for business waivers from real estate-related industry groups in Pennsylvania, but on Friday it did announce that some in-person activity, including inspections and appraisals, is allowed for sales under contract before March 18.
The ability to show houses virtually to clients, stage empty homes, and communicate with clients and colleagues has been "crucial to keeping the market going," said John Bilek, broker of record for Pennsylvania and Delaware for Compass Real Estate.
"Buyer demand is still very, very high. Inventory is still very, very low. That's still creating a very robust real estate market," Bilek said. "We went into this with low inventory, and this is only exacerbating that."
The rate of contracts "has diminished greatly," but closings are still happening, he said, which speaks to the strength of the market in the Philadelphia area.
"When we come out of this, we think it's going to be a very, very busy season," he said. "Whether that's late spring, summer [or] into the fall."
Kim Whetzel, head of Team Whetzel at Kurfiss Sotheby's, listed a new construction project in Chestnut Hill, even though the builder had to stop work, so buyers can see what's coming.
The coronavirus is one reason two of her clients, who are empty nesters and live in a new townhouse development in Montgomery County, are moving into a house in Chestnut Hill in May.
"They've been in self-quarantine basically since the beginning of March, and they're like, 'You know what? We want a little more space,'" Whetzel said.
Early this year, Katie and Greg Langton began searching for a house in the area, so they and their young children could move from Hoboken to be closer to family. They didn't plan to buy now.
"But then our perfect dream house came on the market," Katie Langton, 37, said. It's an old Tudor-style house in Wyndmoor, Montgomery County, that is move-in ready in a cute neighborhood where inventory is scarce.
They found it in early February and closed on Friday.
"We sort of started off the process in normal times and mid-process everything kind of changed on us," she said, adding that the transaction was "fairly smooth, considering."
"We feel very lucky," she said. "We know a lot of factors could have changed that."
Jaclyn Huston and her fiance, Kerry McAnany, both 28, had planned to buy their first house after their August wedding. But with mortgage interest rates at historic lows, they feared houses would sell quickly.
The couple, who live in an apartment in Fishtown, found a vacant house in the neighborhood about a week before the city shut down. They're scheduled to close on May 22. They signed paperwork electronically, including an agreement pledging flexibility if the pandemic slows the transaction and protections for them if they get laid off and can no longer afford the house.
Huston, a school counselor, and McAnany, a private investigator, sometimes browse listings online while they're home.
"'We're finding not much has been put on the market, so we're happy we jumped on that house before things got very, very serious," Huston said.
Jeff Block, a Realtor and head of the City Block Team at Compass Real Estate, has about 10 houses that normally would be on the market now. But clients in occupied properties have decided to wait.
"Is it going to be weeks, months? We don't know," Block said.
Wilmington residents Matt Martelli and his wife, Vicky, were "chomping at the bit" to list the home they'd been renting out for three years in University City, Martelli said. They had spent tens of thousands of dollars to spruce up the twin he built a decade ago. Whether to list during the pandemic was "not an easy decision to make," but they didn't want the work to go to waste, he said.
The listing for the $1.5 million home went live April 2.
"The truth is, people aren't looking at homes now. So, yes, there is concern for me," said Martelli, 45, director of operations for a property management company. "As far as we were concerned, it's time to list. ... At least we get it out there" — virtually.