“Have you seen what has been going on in the world the last few weeks? Put me on the back burner for a few months…” This was my first real sign that things were about to shift in the Buckhead real estate market. It was two weeks ago, March 9th, when I got this message from one of my clients. We had been planning to put his nearly $6 million home on the market soon.
A few days later, I showed a beautiful $3 million home to a local family. They loved it. The stock market had done really poorly that week and the buyers said that they might want to move forward, but needed to wait for their stock portfolio to recover first. The following week the stock market lost another 15%+. I have not heard from them since.
These are two real-world examples of deals that have been put on hold before they even began. The global uncertainty, drop in the stock market, and travel limitations have suddenly tapped the brakes on an otherwise healthy Buckhead real estate market. It’s happening at the worst time of year – when the spring selling season typically kicks into high gear as families look to buy and sell before school begins again in the fall.
In the stock market, sellers flood the market in times of uncertainty, resulting in fast and severe price drops. My initial read on the current real estate market is that the opposite is happening. Many home sellers are holding back on listing and selling their homes until the uncertainty is over, and this is resulting in lower inventory.
This chart is already showing moderate, but not severe, declines in new listings and contracts written in the first 3 weeks of March 2019 vs 2020.
Meanwhile, buyer activity is down significantly but has not stopped. I am getting calls from buyers who see this as an opportunity to buy with less competition and to take advantage of the circumstances. Property showings (and even a few open houses) have continued, with extra precautions and without the handshakes. Events in the last 24 hours, including a 2-week “stay at home” order by the mayor, are likely to put an end to the already-sparse activity.
In 2015 I adopted cutting edge technology which allowed me to 3D scan my listings and create a virtual model of each home. While the high cost and time-consuming process has kept this marketing tool from becoming mainstream with other Realtors, I still create a 3D model of nearly every property I list. This has proven to be an attractive tool to spark interest of buyers across the country, or on the other side of the world. In one case, I even sold and closed a nearly $1 million townhome to a buyer who had only seen the 3D model; he never visited the property in person until after he owned it.
Want to try a “Virtual Showing” for yourself? It’s pretty fascinating once you get the hang of it. Here are several Buckhead homes you can tour right now!
I have had over 650 “Virtual Showings” of my listings’ 3D models in the last 30 days; a significant increase. I have heard from several buyers planning to relocate to Buckhead this summer who are unable to travel here to see homes as planned. For now, walking through in 3D is as close as they can get to the real thing. I am also using our 3D models to “screen” potential buyers and make sure it is worthwhile to meet by requiring that they view the home virtually before scheduling an in-person showing.
You should contact me for advice based your individual situation, but generally I would suggest the following:
Buyers: If you are a ready, willing and able buyer right now, then you can expect a window of opportunity with less competition and some good options… if the sellers will let you in to take a look, that is.
Sellers: We are busy getting our sellers’ homes prepped, staged, and photographed so that we can have them ready to go. The “right time” will vary for each seller, but we know there will be pent-up demand released when this logjam breaks! I am advising my current sellers to stay the course, even if there is a big reduction in volume, deals will still get done.
Homeowners: If you are not selling your home this year then keep an eye on interest rates and refinance when they get to the right point.
I do not want to minimize the health risks posed by the Coronavirus/COVID-19. It is certainly a deadly virus that should be avoided. I am hopeful that the scientists, many of whom are our neighbors and friends, at the CDC are able to quickly find solutions. However, the economic costs are far more apparent in our community than any health costs at the moment.
Almost all shops and malls in Buckhead have closed, restaurants have become delivery only (who knew you would be able to one day order from Le Colonial on Uber Eats?) and all major events canceled. Schools are closed, likely for the rest of the school year, and families are clustered at home taking it day by day. The lack of economic activity will surely take a toll on jobs, businesses, and real estate sales in the short term.
My own business will suffer. Last year was a record year for me with sales of over $84 million in Buckhead, a number that will be all but impossible to achieve this year. I was planning to receive an award from the Atlanta Realtors Association this past Saturday at a gala recognizing me as the #1 individual Realtor in Atlanta for the 2nd year in a row. Instead, they sent an email blast, and I assume a plaque will be in the mail.
One thing we know for certain: this will pass, and our community will be as strong as ever. Atlanta will continue to be a vibrant city, and Buckhead will still be the “address of choice” as Sam Massell likes to say. Traffic will return to the empty streets, and life will go on. For now, maybe we should all just take a deep breath and make the most of this rare pause in our busy lives.