The housing market, locally and across the state, was set for a steady upswing this spring, but that came to a screeching halt when the coronavirus pandemic began. Now the real estate industry may see a lasting negative impact long after other businesses are permitted to reopen, according to Lyndsey Gallagher, chief financial officer of Century 21 American Homes in East Meadow.
Gallagher’s franchise, which includes 10 offices across Long Island and the five boroughs, is often busiest in April, May and June, when her staff routinely files 250 to 300 contracts for home sales. Then, over the summer, many families move into their new homes before school starts.
“If we put 20 or 30 [contracts] in now, we’d be lucky,” she said. Fewer contracts means there will be fewer closings, and less income this summer. “I already applied for payroll protection for all of our locations,” Gallagher added.
In East Meadow, there are usually 20 new houses listed for sale in the first two weeks of April. This month there have only been three, said Joseph Brown, who works for Century 21.
Brown spends his winters, when the market is usually slow, in Wilton Manors, Fla. As the pandemic spread, however, he stayed there because there is little to no business locally. “If there’s no need to sell,” he said, “I would tell clients to hold off for a couple months and see what’s happening.”
Another challenge, Gallagher explained, is that some banks are changing their lending standards to prepare for the toll the virus will take on the economy. For example, JPMorgan Chase recently announced that it would require anyone looking for a home loan to make a 20 percent down payment. Banks usually require a down payment no larger than 10 percent.
“That’s hard, because a lot of first-time home buyers don’t have that,” Gallagher said, “and they’ll have to find another bank to get the money.”
“People have to be careful that the deal they first made is still there,” advised Ross Schiller, a real estate attorney and the founder of Ross L. Schiller & Associates. “So always ask questions to your agent and your attorney — that’s the takeaway from this.”
As an attorney, Schiller’s job is to protect clients looking to buy or sell. That includes adding provisions to account for the pandemic — which mostly means adding time to the selling and buying process.
“The most important thing that people should know is that during this time, be patient, be calm and stay safe,” Schiller said. “Real estate makes the economy go, and while people are scared to act, deals could still be done, and are being done.”
To keep moving forward, Gallagher’s company has been training its staff members with virtual presentations on videoconferencing platforms like Zoom. Its marketing department has created graphics to help buyers and sellers navigate largely uncharted waters. And some agents are coordinating FaceTime calls, on which sellers offer virtual open houses, walking buyers through their available homes.
In addition to taking the home-buying process virtual, some real estate agents are completing some of the steps of that process earlier, to ease the burden on the buyer. For example, Richie Krug Jr., an agent with Century 21 American Homes, said that he was completing home inspections for sellers before they put their houses on the market.
“I do believe that we’re an industry that’s going to bounce back,” Gallagher said. “There’s always demand for someone to move into a new neighborhood.”
Some people want to move now more than ever, Krug added. He explained that one of his clients said that the self-isolation the pandemic necessitated had affirmed her eagerness to get out of her apartment permanently. “Every situation is different, though,” he said, “and some don’t want to be on the market until this is over.”
Gallagher’s advice for people looking to sell is to slow down and take the time for spring cleaning. “This is the perfect time for them to prepare their home … so they could have the house in pristine condition,” she said, “and hit the ground running when this is over.”