Pending home sales jumped by a record 44% in May, according to the National Association of Realtors. That’s the biggest one month jump since the survey started in 2001.
Transaction volume is returning to normal, but the experience of buying and selling is anything but conventional.
‘Point and click’ home buying on the way
As with other industries, Covid-19 has accelerated technological trends. Rascoff, who recently launched dot.LA, a news site covering Southern California’s burgeoning tech scene, is seeing transformational changes in the marketplace, driven by meaningful technological advancements.
“Things like virtual tours, transaction management – that’s entirely online – online mortgage origination, 3D home listings… These things have been around for the last couple of years, but we’re now seeing a big acceleration in those trends as a result of coronavirus,” Rascoff said. He thinks it’s a big win for consumers.
Ali Hegener and her husband sold their suburban New York house this spring while in quarantine. They didn’t even go to the closing. A check just arrived in the mail. Now they are buying another house and that too will be largely done online.
“I almost like it better this way,” Ali says.
Goodbye, Great Room. Hello, Zoom Room
Also changing, what buyers want. According to South Florida real estate developer Jules Trump (no relation to President Trump), home offices could be the key to future sales.
“In our newest tower, we built all four and five-bedroom residences,” Trump said. “Now what we’re doing is we’re showing examples of how you can build it out as an office.”
Rascoff himself is part of this changing design dynamic.
“I don’t have a door on my home office,” he said. “This is a very open-floor-plan-y kind of house. it was great pre-quarantine, the kids could come in and out as they see fit. I would kill for a door now. I’m seeing home designs now where people are building out kind of like audio pods where there’s really good sound, almost like a sound booth for taking calls and doing video conferences.”
New York City prices still “correcting”
While many suburban areas are seeing strength and bidding wars outside of hard hit New York City, the city itself is still seeing weakness. Brown Harris Stevens CEO Bess Freedman says it’s really a continuation of what was happening in 2020 pre-Covid.
“Prior to this pandemic, we were already in a price correction,” Freedman said. “The market was correcting and we were very fluid in doing business. Then the pandemic hit. So I would say this is a huge opportunity market for all buyers who are interested. I think for new developments, they can find incredible deals. And I think that rates are really good. So I think the prices are continuing to correct, and that sellers have to be realistic and let go of pre-pandemic pricing.”