But it’s not business as usual
By Karen D. Lorentz
The real estate business, which had been booming along nicely in the Rutland Region, came to a halt in mid-March — as it did throughout Vermont — as a result of the coronavirus pandemic and “all in-person real-estate transactions” being suspended by an executive order from Governor Phil Scott.
As one of only four states that had deemed real estate services “non essential,” real estate agents could only conduct business according to strict guidelines set by the state.
That meant staying and working from home, noted real estate agent Glenda Silber of Green Mountain Realty in Rutland. She said she could answer client questions (by phone, email) and refer them to already existing listings on MLS but not could not list, show, visit, or take photos of a property someone wanted to list. There was a $2,500 fine if you broke any of the rules and that included removing a for-sale sign on a property that had sold, she said, adding she hadn’t experienced anyone taking “a house sight unseen.”
But doing business changed as of April 20 with a relaxation of rules governing some previously designated non-essential services.
Silber noted that agents can now visit a home to take photos, gather information to list it, and show it as long as there are no more than two people in the home at the same time. A couple must visit with her individually so showings will take a little longer now. Additionally, each must wear a mask and gloves, social distancing must be observed, and any surfaces touched must be cleaned.
It is a step forward but not business as usual, Silber said, adding that anyone coming from out of state must self-quarantine for 14 days before being shown a property. (That includes Vermont residents who had been traveling.) Since hotels, motels, and inns are closed — except for some that are open to persons deemed essential such as EMTs, nurses, and doctors — she said that precludes showings to out-of-staters until that order affecting accommodations is lifted and therefore that market will “slow drastically.” Lodging establishments can begin accepting reservations starting June 15.
Silber added that real estate business had been moving toward virtual showings for some time now and that people have been previewing properties by pictures accompanying listings. Those that do have their “footwork” done and they have “ruled out some looking trips, reducing their selections to five or six versus a dozen or two properties as before.” However, she still believes people will want to see a property so they know more about it when an inspector notes problem spots, stating, “They will know what the inspector is talking about.”
Heidi Bomogen, co-owner of Prestige Real Estate in Killington, said that until the March order business had been very good in Killington. But once the order came down, it shut down business completely because Prestige has a vacation/second homeowner market. She expects business to continue to be slow until out-of-staters can come to Vermont without the quarantine restriction to look at properties.
Citing the uncertainty of that date, she said that mid-April to June is typically a slow time for real estate in Killington anyway, noting that 2019 was exceptional with no slowdown.
With the easing of restrictions, however, she said she can now go in to video a property and that she had had one showing for a woman who had been in Killington for the past month but that she could not honor other out-of-stater requests due to the restrictions in place.
Bomogen noted having received three inquiries about seeing land which she said was unusual.
She said that some prior contracts did close during the past month but that two contracts were cancelled due to the coronavirus and that one included a negotiated loss on the deposit.
She also delisted three properties while they could not be shown, noting the advisability of not having them “age” while the market was shut down and the ability to relist them when it reopens. She did have one condo under agreement without an in-person inspection because the buyer had seen its pictures and was familiar with a similar one.
Bomogen noted closing delays for financing reasons that require a building inspection and appraisals but doesn’t foresee a difference in the way business is done, agreeing with Silber that people have been doing MLS tours for years now but that 90-95% of buyers still want to see and “feel” a property before buying it.
Kyle Kershner, broker/owner of Killington Pico Realty, said that he had been “recommending sellers hold off temporarily” under the original restrictions because the only way to list a new property was if all the preparatory work had been done prior to the Covid-19 crisis.
“While interest in properties is considerably lower than it was in February and early March, when we were at the height of a record-breaking real estate run,” Kershner said he had listed a “moderately priced home with exceptional views” and had received a sight-unseen offer for it already. The offer was contingent on the buyers seeing the home in-person which was “untenable for the seller. The property went under contract as soon as the governor issued Addendum 10 [April 20] to the Stay Home order, which allowed showings under limited conditions.”
Asked about the role of technology now, Kershner said, “The technologies we’ve been using, e.g. digital signature programs, online marketing, etc. are essential under the current conditions. New technologies that allow for virtual showings, such as Zoom or FaceTime, are helpful for buyers who are out of state and not permitted to travel to Vermont, but there are very few buyers who will actually take the leap and buy a property without physically seeing it in person.”
He also noted seeing “a pronounced increase in the number of views of our video presentations in recent weeks.”
Lenore Bianchi, principal broker of Ski Country Real Estate in Killington, wrote in an email that, “In March we saw good activity until the shut down. Once that happened we were not able to conduct business and although we continued to receive calls from people out of state, we had to explain that by the governor’s executive order we were not able to show any property. Just this weekend we received an offer to purchase a property even though the buyers could only look at the exterior of the property.
“For the properties that we had under contract at the time of the shut down, we have seen some buyers want to withdraw and some buyers want to make sure that the seller can’t withdraw from the contract.
We are working to adjust to the executive orders from the governor and to make sure our agents, buyers and sellers will feel safe. We are currently open by appointment only and hope to move to a more open situation in the near future.”
Expectations for future
While second quarter sales activity is down and there is still uncertainty as to when restrictions like social distancing and wearing masks might be lifted, agents expect sales will pick up. They also foresee a possible surge of interest among out-of-staters once hotel restrictions are lifted and people can stay here without quarantining for 14 days.
Silber said she expects to see a surge in interest among out-of-staters in Rutland Region properties, noting that “immediately after 9-11” she had “three clients from New York purchase homes” in the area. Some will move to Vermont permanently because they are able to work remotely and because we have airports in Rutland and Burlington for the necessary occasional business trip, she said. She also noted a need for internet and cell service, stating that she foresees it continuing to be a requirement.
Bomogen also commented on the definite uptick in demand for Killington properties after 9-11 and feels something similar may occur in the future. But asked about potential hurdles to that, she noted a new uncertainty due to the pandemic causing a loss in investments and jobs. Some may not have the discretionary income for a vacation home as a result, but if things improve, that interest could potentially be seen over a longer period of time, she opined.
Still the idea of Vermont being perceived as a safe haven seems realistic to her, and she also thinks there could be a slow down of people traveling to western ski resorts due to a reluctance to be in congested airports or ride on airplanes for a while. That could bring more business as Killington is a drive market, she noted.
Kershner also foresees an increase in interest among out-of-staters. People perceive Vermont to be a “safe haven” due its rural nature. “Without question, we are seeing interest in Vermont properties now from buyers in the densely populated metropolitan areas of the northeast,” he said.
“A key consideration for those buyers is internet connectivity. With so many employees working from home today, many seem to be experiencing the epiphany that they could just as readily work from the safety and serenity of a Vermont home as they can from their urban locations. But broadband, high-speed internet infrastructure is imperative for that dream to become a reality,” he noted.
“Some newspaper articles are saying city dwellers want to move to more rural areas, so that should mean buyers will come,” agreed Bianchi.
According to a recent report in the Wall Street Journal and comments made on CNBC’s “Closing Bell,” there is more interest in rural than urban properties now. “We have seen that people are more interested in that house at the foot of the mountains by the lake,” said Glenn Kelman, CEO of the national real estate brokerage Redfin, on CNBC’s “Closing Bell.”
He reported that “Rural demand is much stronger right now than urban demand, and that’s a flip from where it’s been for the longest time, where everybody wanted to live in the city. We’ll see how it comes back, but there seems to be a profound, psychological change among consumers who are looking for houses.”
Citing so many unknowns and uncertainties about changes to come, these agents noted that it’s impossible to predict a return to “normal” for real estate transactions, but they are optimistic that the needs of people for selling and buying can be met and that this region will continue to see keen interest among out-of-staters.