Nearly 85 percent of California REALTORS® surveyed between 3/14/20 and 3/16/20 expect the coronavirus to have a negative impact on their business. The biggest areas of concern include open house traffic, where roughly 80 percent expect negative effects. In addition, California REALTORS® expect adverse impacts to sales and the expected time on market it will take to sell a home. In addition, nearly two-thirds expected less supply on the market, and more than half expect to run into problems during the closing process. More than half of REALTORS® surveyed have already experienced buyers holding back on a purchase due to the coronavirus. Less than 45 percent of REALTORS® had experienced a seller holding back due to the coronavirus, however more than 10 percent of respondents have experienced a seller removing their home from the market completely due to the outbreak, which will likely depress housing supply even further.
From a macroeconomic standpoint, housing demand is likely to be negatively impacted at the top end of the market due to weaker demand from potential buyers who have recently lost wealth in the stock market. However, low rates will likely attract buyers who rely heavily on debt financing to purchase their home. On net, C.A.R. expects that economic uncertainty, a lack of available inventory, and slowing demand to result in fewer home sales in California this year. C.A.R. expects lower home sales this year than the 393,500 annualized rate it initially forecasted last fall.
