Santiago Gomez and Nicole Kosheba, realtor/broker and design and marketing director, respectively, for Santiago Properties, were gearing up for a busy spring home selling and buying season during the start of the year. With the expectation that they would be very busy for several months, the pair took a vacation just ahead of the expected bustling season — and then COVID-19 hit the United States hard.
“We almost got stuck in the Dominican Republic. We got out just in time,” Gomez said.
Instead of the busy season Santiago Properties expected, the stay-at-home order meant realtors across the state could no longer show homes in person.
“During the stay-at-home order, especially March and April, everyone was freaking out, wondering what was going to happen. No one had answers,” Gomez said.
“Before the lockdown, we were poised for a record year. At the beginning of the year, housing prices in Grand Rapids, and really all across the country, hit an all-time high and we were seeing things continuing to go up in value, primarily due to low inventory as we’ve had for four to five years now. Everyone was optimistic, mortgage rates were low and continued to stay historically low. We had tons of sellers lining up or getting ready to list in the spring market. We had some excited buyers.”
Gomez said many buyers decided to hold off on searching for a house during this period because of the restrictions and many sellers decided to wait out the stay-at-home orders as well. Though he noted, sellers who chose to remain on the market continued to receive multiple bids and were able to sell their homes to buyers with a little more risk tolerance.
Walter Perschbacher, vice president at Greenridge Realty, echoed Gomez’s remarks, saying, “During the shutdown we saw market-wide a reduction of sales between 45-50%. That means half of the business that is normally done was still done as people were putting deals together without ever having stepped foot on a property.”
Perschbacher said Grand Rapids was in line with other markets that experienced similar COVID-19 cases. “If you look at markets like Detroit, New York City, some of those hot spots, they saw a much bigger reduction, up to 80-85%, and it will take them longer to recover.”
By June, Grand Rapids’ real estate market already was beginning to recover. Perschbacher noted his firm saw its number of new listings triple, homes that returned to the market tripled and homes that went under contract also tripled.
“Basically, we are back at where we were year-over-year, and interestingly, prices are still going up, because demand is still more than supply and interest rates are still low,” he said.
Greenridge Realty and Santiago Properties are expecting a strong fall market as well, even as the country has officially fallen into a recession.
“People always need a place to live, so it doesn’t stop because of the change in the economy,” Gomez said. “It might change a bit, but there is such a demand for homes and not nearly as many homes out there. It’s going to continue into the fall.”
And Perschbacher noted the recession won’t have the same impact as the 2008-09 recession — which impacted the real estate market through 2012 — in part because the current situation is a health crisis, whereas the previous recession was caused by the real estate industry.
“What was most interesting to me was witnessing how the market held up through the pandemic,” he said. “If you follow bigger trends, everyone is waiting for this next recession and this was this ‘black swan’ event and people were thinking this might be it, here’s where real estate will suffer, and part of that comes from people’s memories of the last downturn from ’08 to ’12. Real estate suffered a lot and that was caused by the industry, so that is why the industry really suffered.”
Gomez said while home sales typically start to taper off in September and October, this year he thinks homes will continue to sell into November to make up for some of the lost time this spring.
Both realtors believe the continued low housing inventory coupled with low interest rates makes the current time a great time for sellers as well as buyers.
“It is still a seller’s market, and at a variety of price points, not just first-time homebuyer price point. The benefits to buyers are interest rates being as low as they are, and West Michigan is still one of the most affordable markets for overall cost of living that you can find nationally,” Perschbacher said.
So, if you are looking for a new home, now might be the right time to make your move.