The Coronavirus pandemic will likely have several long-term effects on the NYC real estate market, such as accelerated adoption of 3D Virtual Tours and a new wave of permanent rules and restrictions on open houses implemented by condo and co-op buildings.
There will likely be many other short and medium-term effects, such as greater required financial vetting of buyers before scheduling private showings, more restrictive access for tenant-occupied properties, capacity control for open houses as well as reduced demand for investment properties and second homes.
We analyze the long-term effects of the Coronavirus on the NYC residential real estate market in the following article.
Even after social distancing runs its course, the Coronavirus pandemic will likely accelerate the adoption of 3D Virtual Tours and property videos by listing agents in NYC.
In fact, many platforms such as StreetEasy rapidly added 3D Virtual Tour capabilities to their listing interface within a matter of weeks after the pandemic’s arrival.
Over the long-term, we anticipate that many brokerages and listing agents will embrace both 3D Virtual Tour and property videos and incorporate this as part of their listing agent service offering. Sellers will likely also demand this technology from their listing agents, and sellers will likely place a greater emphasis on the accessibility of this technology when determining who to hire as a listing broker.
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We anticipate that over the long-term, many condo and co-op buildings will adopt additional rules and restrictions specific to open houses and private showings.
Many larger condo and co-op buildings in NYC already had strict rules regarding open houses and guests prior to the pandemic.
Many buildings prohibit open houses altogether, while others have policies requiring two agents and/or policies requiring all guests to be escorted at all times.
We’ve always felt that such rules are incredibly harmful to a seller’s marketing efforts, and ironically these same rules which are presumably intended to improve the safety and quality of life of owners actually reduce property values in these buildings by making it harder to show properties. That being said, the pandemic will likely catalyze rapid rule changes in many NYC buildings which, despite the long-term harm they may cause to property values, will likely not go away for years, if ever.
More reasonable buildings might not necessarily ban open houses in the wake of Coronavirus, but they may limit the number of open houses permitted on any given day or increase the notice period required for listing agents to request permission from management. The bottom line is that many buildings will increase the red-tape when it comes to selling, and this will harm sellers and create more work for listing agents.
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Over the long-term, our experience with the Coronavirus pandemic will likely result in a push by sellers and listing agents for greater financial vetting and scrutiny of buyers as a condition of scheduling private showings. The days when buyers and buyer agents could simply request a private showing without providing any background or financial insight are likely gone for good.
Sellers and tenants will likely be much more restrictive and cautious when it comes to allowing strangers into their homes. We believe that private showings will likely only be considered if a buyer has already viewed the 3D Virtual Tour, shared their financial qualifications, discussed the listing at length with the listing agent and expressed a serious desire to possibly submit an offer subject to an in-person viewing.
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In the wake of Coronavirus, we anticipate that regulatory bodies and/or real estate trade groups will likely issue guidance regarding capacity control at open houses. It wouldn’t surprise us if the packed open houses with 50 to 75 attendees for one-bedroom apartments Park Slope, for example, are a thing of the past.
There will likely be a strict limit on the number of buyers permitted into a unit at any given time. For popular units, this will likely result in a line outside the building, similar to what we experienced with stores like Trader Joes in Manhattan during the peak of the crisis as they adopted social distancing measures.
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Our Discretion, Your Advantage
Our traditional partner brokers never openly discount which means less disruption and better execution for you.
In the years after Coronavirus, we anticipate that tenants will be less cooperative when it comes to providing access for showings and open houses. Tenants in NYC were already notorious for limiting access and possibly being non-responsive to showing and open house requests, and this was always a challenge for landlords and sellers.
We believe that the legitimate healthy and safety concerns which arose during the peak of the Coronavirus pandemic will likely make tenants even more resistant to requests and less cooperative overall with landlords, sellers and real estate agents, even when the health risks of the pandemic subside completely.
Moreover, the post-pandemic legal and regulatory framework in NYC will most likely be highly favorable towards tenants at the expense of landlords.
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