Editor’s Note: This story highlights comments from the April 7, 2020, edition of WFAE’s “Charlotte Talks.” Panelists’ remarks were lightly edited for clarity and conciseness. You can hear the radio show in its entirety at this link.
John Kindbom, president of Canopy Realtor® Association and Canopy MLS, joined three other real estate observers Tuesday morning on WFAE Radio’s “Charlotte Talks.” In an hourlong show, the panel addressed: “What Does COVID-19 Mean For An Otherwise Hot Housing Market?”
The other panelists were Ashley Fahey, real estate editor for the Charlotte Business Journal; Charlie Dougherty, an economist with Wells Fargo Securities; and Kim Graham, executive director of the Greater Charlotte Apartment Association.
Following is a summary of the discussion with the most relevant insights from John Kindbom and Ashley Fahey.
Leading off the discussion, host Mike Collins asked Kindbom to address the health of the Charlotte-area market before the pandemic as well as how the market is operating now.
“The first quarter we were ahead of last year (in the first quarter) by a decent margin,” Kindbom said. “Home prices were still going up. …We were expecting (the spring selling season) to be a pretty big one, still limited by inventory. That was the only thing in the way. Everything else was really humming along, and we were expecting pretty substantial gains. That’s not where we are any more.”
Concurring about the region’s strong first quarter, Fahey said, “I have heard from a lot of people that the first quarter was the strongest we have had in a long time. It’s almost like we had an early spring season.”
Kindbom agreed and noted two good things happening as a by-product of statewide and local stay-at-home orders to curb spread of the coronavirus.
“Real estate agents are learning how to do business differently — how to take advantage of technologies out there that we haven’t used because nothing forced us to learn them,” said Kindbom, a regional vice president for Allen Tate Company.
“Most showings (now) are being set up virtually,” he noted. “People are learning how to make better use of tools and to do business differently. It’s going to be a different world when we come out of this. There are going to be new systems in place that are going to be useful to help people” buy and sell homes.
Also as a result of the current market, Kindbom predicted, more consumers will see the value of using a Realtor® — “more so than if things had kept going the way there were. Frankly it was a hot market and people didn’t always see” the significance of Realtors®.
Does Kindbom expect “a surge of interest” in buying and selling once the pandemic is over, Collins asked?
“Yes,” he said. “I’ll take it one step further. The interest is still there; we are just limited in what we can do. We had a lot of sales last week, not as much as the same time last year, but still a huge demand. We are just doing it (transactions) differently now, and it’s going to take longer time periods to get things to the table.”
‘Wait and See’
Addressing Fahey, Collins asked how she would describe the virus’s impact on the residential market.
“A lot of it is waiting and seeing; there is still so much we still don’t know,” she said. “A lot depends on how long social distancing lasts. A lot depends on when businesses resume normal operations, and what normal looks like when things resume. A lot of people are hesitant to make real, solid predictions as far as how we will come back, and that goes for residential and commercial real estate.”
Many home builders are continuing construction because they are considered an “essential” business by the government, Fahey noted, but how residential sales will play out is up in the air. “For the immediate future, it’s hoping the spring selling season (simply) gets delayed to summer or fall,” she said, “but some worry about extra financial pressure on would-be buyers right now, that the money that would have gone to a down payment has to go elsewhere.”
Despite being in a recession because of the pandemic, economist Dougherty said the recession would dissipate once the virus is curtailed. “I think we will get back to activity, but it’s going to be a little slow,” he said. “Once we get containment under control, and the economy starts to open up again, we’ll see a slow and gradual return to economic normalcy — not like flicking a light switch.”
Dougherty thinks the Charlotte region will rally a bit faster than the country as a whole. “Heading into this, we were on such strong footing,” he said. “Charlotte is one of the fastest growing economies in the whole nation. All the positive aspects of the economy are going to be in place.” In particular he cited job growth in the banking and fintech industries and that as a result people will continue to move to Charlotte.