Coronavirus Pandemic’s Effects on The Charlotte Real Estate Market
By Hope Yancey
Charlotte’s real estate industry, and real estate agents themselves, have faced a variety of new challenges as a result of the coronavirus pandemic and county and state stay-at-home orders and related restrictions.
The pandemic hit locally in March. According to market data from Canopy Multiple Listing Service and the Canopy Realtor Association, counties in the Charlotte region had 4,254 closed sales in March 2020, and 4,032 in March 2019.
There were 3,534 closed sales in April 2020, and 4,464 in April 2019, data show. For April, that’s a decrease of 20.8 percent from a year ago. April figures were the latest available, as of this writing.
In early versions of business restrictions, appraisers and title companies were deemed essential to allow for the completion of transactions already underway when the pandemic struck; however, real estate agents could not show homes to clients. Restrictions were later modified to permit them to show vacant homes. Eventually, restrictions were amended to allow for the showing of occupied properties.
“We’ve come a long way since then,” real estate broker and realtor Belinda Carr Lipscomb says of the initial days of the pandemic. Carr Lipscomb is the founder and owner of Elite Homes of the Carolinas, and has 26 years of experience in real estate.
Early on, agents relied on photographs and virtual tours. Carr Lipscomb held orientation sessions with clients via Zoom, the video-conferencing platform. Through professional photography and videography, a home may look different than it looks in person, she says.
In some cases, buyers purchased houses without ever visiting the properties. Just before the pandemic began to affect local conditions, clients in Washington state bought a house in the Charlotte area for its investment potential without seeing it in person, says broker/Realtor Rashad Davis, whose R2D Real Estate Group is affiliated with Engel & Volkers, a global network of real estate professionals. The buyers viewed the house through FaceTime video calls. They stayed in Washington and did not travel for the closing.
“As a matter of fact, they were the first ones to tell me how serious it was,” Davis says of the pandemic.
Drive-up closings have been part of the home-buying experience for some people. Clients received documents in advance and attended the closing only to sign those pages that required their signatures, never getting out of the car, says Carr Lipscomb.
During the time agents were restricted to showing only vacant homes, not only did sellers need to have moved out, their belongings had to be gone as well.
Face coverings, gloves, shoe covers and disinfectant wipes became tools of the trade.
As of this writing, real estate agents now are able to show occupied properties to clients in person. Speaking in early May, Carr Lipscomb says some closing attorneys are still limiting closings to signers only and not allowing agents to attend. She expects to see that loosen.
Charlotte is a seller’s market, with low inventory and prices holding steady, she says. She hasn’t found buyers particularly hesitant. Related industries, such as home inspectors, are staying busy, she says.
Mortgage lenders are tightening credit score requirements for borrowers though – something she hopes won’t continue.
Many workers have been furloughed or lost jobs during the pandemic. Both Carr Lipscomb and Davis say the first call a homeowner at risk of falling behind on an existing mortgage should make is to their lender. That may mean either short-term help or getting out of the property without a foreclosure, Davis says.
The website of the federal government’s Consumer Financial Protection Bureau outlines mortgage forbearance provisions of the CARES Act, legislation passed in response to the coronavirus national emergency. Forbearance refers to when a mortgage servicer or lender allows the borrower to pause or reduce mortgage payments for a time period. It is not free money. The CFPB notes the debt is not eliminated, and missed or reduced payments are pushed into the future.
As for tenants of commercial properties who can’t pay their rent, Davis says he’s seen a mix of approaches. Larger commercial landlords have tended to be more “absolute” than smaller ones, he says. Some landlords have been more flexible, he says, noting they may not be able to find another tenant right now.
Davis expects an “avalanche” of real estate activity as the pandemic begins to subside, and advises home buyers to prepare for the market by working on their finances, he says.
He anticipates relocations to Charlotte by people who may have been “on the fence” about moving in the past, especially from areas hard-hit by the pandemic, such as the Northeast.
Carr Lipscomb believes, given the strength of the Charlotte market, real estate is still a great investment, she says.