Wisconsin’s real estate industry expects practices adopted in response to coronavirus — like virtual tours and closings conducted in cars —are here to stay.
Realtors embraced virtual showings and other new ways to do business since the pandemic shut down wide swaths of the economy in March.
“Everybody’s using virtual tours right now,” said Mike Ruzicka, executive director of the Greater Milwaukee Association of Realtors. “Everybody — all the large firms, small firms.”
In an occupied home, routinely bringing in prospective buyers went from commonplace to dangerous during the pandemic. Even in vacant homes, the idea of touring from the safety of one’s own living room grew in popularity.
The shutdown’s impact on what was a robust housing market is only coming into focus now since sales closed in late April could have started before emergency shutdown orders took effect. The Wisconsin Realtors Association reported a 6.9% drop statewide in existing home sales in April and there’s an expectation that sales will drop further just as the state enters its peak home sales season.
The news wasn’t all bad for buyers and sellers. Mortgage interest rates remain low and the low volume of homes for sale statewide have pushed the median purchase price to $214,000 in April 2020, compared to $195,000 one year ago.
Mark Olejniczak, of Mark D. Olejniczak Realty in Green Bay, said he expects the coronavirus set the housing market back a bit, but that it doesn’t change the pent-up demand to buy, upscale, downsize or otherwise transition to a new home.
“We do not know if the market will come back or not, but I’m finding people still want to buy, want to take advantage of low interest rates.” Olejniczak said. “There’s certainly still demand for starter and mid-priced homes and an urgency to get in at these cheaper interest rates.”
While they hope the drop in sales is temporary, Realtors across the state said they expect changes implemented to have a lasting impact.
“I see this as a shift in the way we do things,” said Will Knight, a Shorewest realtor in Milwaukee.
Realtors like Richard Ruvin, lead partner at Falk Ruvin Gallagher Legal Team in Whitefish Bay, already did video tours of occupied homes and some vacant homes, but when the pandemic hit, every home got a virtual tour in addition to photo galleries.
“You can only capture so much from a photo,” Ruvin said. “A video provides even more information like layout, especially.”
Candace Kriner, a Realtor and partner at Appleton-based Centruy 21 Affiliated, expects the changes born in response to the pandemic will continue to allow buyers and sellers to make better use of their time. Buyers can use virtual tours to hone in on properties they want to look at rather than spending all day visiting homes, and sign closing papers online or in their car rather than scheduling a visit to a title company.
“I think these safe practices will stick around for some time,” Kriner said. “We’re going to cater to, as we always have, what our customer wants. We’re not going to do anything unsafe, but if it’s safe and they want to look at every single home in person, we can accommodate that.”
There’s no blanket formula for how real estate agents are doing virtual tours. Some aim to give an extensive look at the house as if someone was inside using 3D imaging and other technology.
Ruvin, on the other hand, views virtual tours as a way to pique interest in the home. Sometimes, it’s as simple as a realtor going inside the house and starting a FaceTime call with the prospective buyer.
“We keep it simple,” Ruvin said. “We’re not looking to do an exhaustive video.”
But don’t expect traditional open houses to be going away long-term.
“People will go back to more traditional ways of seeing houses,” Knight said. “But they’ll still expect virtual tours that they got used to.”
Kriner can see the same thing happening with alternative closings after experiencing one herself last week.
“It took us three minutes to close,” Kriner said. “The title company was there to explain it. I thought it was fantastic.”
Buyers are still hesitant to pull the trigger on a home sale without first seeing the house in person. It’s not totally unheard of, but Ruvin said it’s not a common occurrence.
“Every year, we sell a home or two solely off video,” Ruvin said. “We’ll still continue to see that. But we don’t expect that proportion to grow substantially.”
That might be different, Ruzicka said, in an area like Chicago or Miami with more people moving quickly.
At the end of the day, Ruzicka anticipates buyers still wanting to see the neighborhood and get a sense of the area before making a 30-year purchase.
“In order to really pull the trigger, you’re going to want to go see the property,” Ruzicka said. “And smell it, feel it and check out what the neighborhood is like. … The in-person stuff isn’t going to change.”
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