From March 15 to April 15, housing sales in the region and the surrounding area were down 40 percent from the same time last year, according to the Grand Rapids-based Greater Regional Alliance of Realtors.
Trapped in his home office, Grand River Realty LLC owner Pete Bruinsma said the drop felt much more dramatic. Moreover, the deals that did manage to go through were likely already in process since February or March. In a timeframe when he would normally sell about 10 properties, Bruinsma said he closed on just one vacant house, a sale that was in motion before the shutdown.
Under the state’s stay-at-home home order and the classification of real estate agents as non-essential workers, realtors were forbidden from conducting business outside of their own homes from late-March until last week. Some relied on photos and virtual tours to show properties but most activities were curbed, according to Bruinsma, who said Michigan is the 49th state in the nation to allow real estate agents to resume showing properties with social distancing, including gloves and face masks.
“I started keeping a list of states who allow in-person real estate activity and quit when the list got too long,” Bruinsma said.
Real estate open houses are still prohibited, but workers can now enter homes and conduct in-person meetings to develop a new listing. As well, clients can enter a home to view the property or to sign necessary documents.
Although housing activity in West Michigan had been effectively frozen during the state’s stay-at-home executive order, the markets are not expected to exit the crisis chilled, according to Bruinsma.
“I highly anticipate the market picking up right where it left off before the shutdown,” he said. Spring is a critical time for real estate activity, especially in West Michigan where people avoid moving during the cold and snowy winter months, he added.
“All of that pent-up demand over the winter kicks in in the spring and it kind of defines the year,” Bruinsma said.
The housing market in the Grand Rapids metro area has consistently ranked among the “hottest” in the country during the past several years. In 2019, houses in the region were averaging just 10 days on the market with a median listing price of $178,050, up 11.3 percent from the year before, according to data from Realtor.com.
After a normal lull for the holidays, market activity had already started to surge this February, according to Bruinsma, who said the spring sales spike has begun earlier and earlier each year.
“It’s crazy. Right at the beginning of the year, when people started coming back out, I saw people bid way too much for stuff because there was just no supply,” Bruinsma said, noting that any suppressed inventory from the past several weeks will not fill the gap. “People have such high confidence in the value of real estate right now, especially in Grand Rapids. It’s kind of an anomaly because even if they think they’re not going to get their full value or they’re going to have to compromise on value at the moment, they’re going to maybe delay on listing it.”
Those decisions will keep competition high in the area in the short term, but seasoned realtors are still wary of the effect a recession spawning from the COVID-19 crisis and widespread unemployment could have on their businesses.
“There are no precedents for something like this,” Bruinsma said. “Yet, despite it being an entirely different type of situation, we have the 2007-2009 housing crisis in close memory and it affects perception.”