Buying, selling, building a house during the coronavirus: what it looked like
Eric Stasik was casually looking to buy his first home last year. Then the pandemic struck and its travel schedule accelerated.
He was staying in a motel to protect his extended family from possible exposure to COVID-19 while he continued to work. Stasik was also buying real estate at a time when restrictions prevented agents from showing homes in person.
This temporarily kept many from buying – but not Stasik.
He closed a two-bedroom, 1,000-square-foot, ready-to-move-in home in Clay Township near Lake St. Clair in May, realizing years of dreams in the making.
“For a starting house, I couldn’t have asked for something more perfect,” said Stasik, 35.
He settled in with Gambit, a 75-pound rescue pit bull mix, at the house on a quarter acre. It is minutes from his job where he works in shipping and receiving for a tooling company.
If Stasik had waited any longer to buy, he might not have had his house. When certain restrictions on the real estate sector rose in May, the market surged.
Now here are more buyers than sellers, which has led to dozens of offers on a single home.
“It’s crazy competition,” said Katie Weaver, president of the Greater Metropolitan Association of Realtors. “We are seeing several offers. Houses have only been on the market for a few days… sometimes it’s hours.
Last year saw 15% fewer new listings than a year earlier and a $ 19,000 jump in the median selling price to $ 198,000, according to data from Realcomp Multiple listing service based in Farmington Hills. Limited activity during the early days of the pandemic in March, April and part of May contributed to fewer registrations, according to Realcomp CEO Karen Kage.
Real estate experts say many factors are fueling low inventory, including low interest rates, COVID-19 restrictions and anxiety over where people might land after selling their current homes.
Jim Shaffer of Jim Shaffer and Associates, a real estate agency in the Woodward Corridor, said some homeowners were not putting their homes on the market during the pandemic.
“Their home is in chaos, like the rest of our lives, “he said.” They teach at home. They work from home.
With everything going on, it can be intimidating to consider preparing a house to show off, especially when it doubles as an office and school.
Other factors contributing to supply include a shortage of new homes built after the recession about a decade ago and some homes have become rentals.
The pandemic has also receded the new housing market. Construction was temporarily halted last year, material prices skyrocketed and some who expected to move in 2020 have been forced to postpone those plans.
Krissy Jessop, an agent for Keller Williams Realty Central in Sterling Heights, and her fiancé, Chris Wald, are in this situation. They signed a construction loan in mid-March.
Quickly, COVID-19 changed the timeline of the end of their nearly 2,300 square foot home in Richmond. The couple initially expected the four-bedroom, three-and-a-half-bath home in Macomb County to be ready in about eight months and planned to move in late 2020.
“I remember when we were sitting at the closing table, they said in a month, we should be able to innovate,” Jessop recalls.
As COVID-19 spreads, government orders construction work stopped. Instead of leading the way in April, he was pushed back to July. Since then there have been delays and difficulties in obtaining necessary items such as kitchen appliances.
Jessop and Wald, both 41, expect it to be a few more months before their house is finished. They know that much of what caused the delays is beyond the manufacturer’s control.
“We have to have patience,” Jessop said. “We have to be positive. “
Bob Filka, CEO of the Michigan Home Builders Association, said many builders he spoke with across the state said it took at least a year to build a house amid the pandemic – sometimes double the time it took before COVID-19 .
In addition to shutting down for a quarantine period if crew are exposed to COVID-19, manufacturers have faced supply chain issues further slowed down by hurricanes in the south and rising costs of supplies, he said.
“If you go back and compare the prices of lumber just before the pandemic and today we’re talking about a $ 26,000 increase in the cost of an average home in our state,” Filka said. “This kind of price escalation is pretty dramatic.”
The Home Builders Association of Michigan predicts that 16,017 single-family home permits will be issued statewide, up 7% from 2020.
Yet, said Filka, this is not enough to meet demand in the state. Before the recession more than a decade ago, the number of new homes built in Michigan sometimes exceeded 40,000 per year. The economic downturn has changed the industry; Michigan has lost builders and tens of thousands of workers, Filka said.
Some real estate experts predict that the sellers market will continue into 2021, driven by low interest rates, low inventories and strong demand. To get the offers accepted, some buyers outbid or find ways to offer money, such as borrowing money from relatives or withdrawing money from 401 (k) accounts.
Stasik is happy to have walked in like he did last year and left the motel, which cost him about $ 300 more per month than his mortgage payment.
At the end of the year, Jessop, her real estate agent, sent her a Christmas decoration. “Remember when in 2020 we bought a house,” he said.
The edge of the the ornament is surrounded by reminders of the year that has been: global pandemic, toilet paper shortage, social distancing and wearing masks.
For Stasik, “it was a good reminder of the interesting ride we had.”
Contact Elisha Anderson: [email protected] or 313-222-5144. Follow on Twitter: @elishaanderson.