Rebuilding America: Real estate business owners hope sales will rise as economy reignites
Many obstacles have plagued real estate businesses across the U.S. since the start of COVID-19, including controversy over whether or not real estate should be considered an essential business to remain open.
Richard Sanders, broker and president of Sanders Agency Real Estate Co. in Pratt, said the real estate market was already somewhat slow before the pandemic because of the depressed agriculture market and the slow oil and gas market, but the COVID-19 crisis has made the situation worse.
Sanders said he has been conducting most of his work remotely, but with courthouses closed, it has been difficult.
“We also do appraisals and need (the) ability to research county sales data,” Sanders said. “That has been cumbersome and difficult with the closing of the county courthouses. Most of the county appraisers’ offices have been very helpful in dealing with this problem.”
Some people have been reluctant to list their properties, Sanders said, while others have been hesitant to allow showings of their homes as COVID-19 cases continue to increase across the globe.
“The commercial real estate market in this area is totally dead,” Sanders said.
While the rental market was already experiencing higher vacancy rates than usual for this area, Sanders said, the market remains soft at this point.
Until a vaccine and/or cure can be found to bring down the number of COVID-19 cases, the future of real estate remains uncertain. Sanders said the situation will continue to affect the attitudes and actions of buyers and sellers.
Many businesses, including Sanders Agency Real Estate Co., have received financial support during this time by way of the Payroll Protection Program, but Sanders said it is going to take a unified effort to remedy the situation.
“The government must stop the bipartisan politics and concentrate on doing what is good for the people and the country,” Sanders said. “We must get the country back to work.”
Victoria Maechtlen, owner and broker of Pratt Real Estate, said that when the first positive case of the coronavirus was confirmed in the United States, it created a lot of uncertainty for the future.
“People were afraid for their jobs, for health and for the economy,” Maechtlen said. “With that, the buying of homes slowed down extremely. However, as the economy declined, so did interest rates, which reignited the market.”
Though Pratt Real Estate had to shut its doors for a few weeks, Maechtlen said, meetings with clients were able to continue by appointment.
“With the government restrictions, holding open houses became a challenge,” Maechtlen said. “Along with those restrictions, mortgages became more difficult to process. Not to mention, people were asked to stay home and not go anywhere unnecessary.”
The combined factors placed strain on the real estate market until people started to learn about the virus and grew more accustomed to the situation, Maechtlen said.
“They were able to understand safety measures better and felt more comfortable getting out. We wore gloves and masks when entering clients homes,” Maechtlen said. “Technology advancements have allowed buyers to see their home online and take virtual tours.”
At this point in time, Maechtlen said, the demand for rental properties has been higher because of lesser terms and payments, and people are seeking affordable homes.
Pratt Real Estate, which Maechtlen opened in 2000, was approved for a small business loan to secure both the business and her employees during the pandemic. In addition, Maechtlen said, she implemented major safety precautions to protect her staff and clientele.
John W. Nixon, broker and auctioneer with Pratt Real Estate, said he moved his real estate broker’s license from his own company, Nixon Auction & Realty LLC in Medicine Lodge, to Pratt Real Estate right before COVID-19 took over, because of challenges caused by the virus, but his actual move fell in the middle of the crisis.
An auctioneer for 39 years, Nixon became the owner of his real estate company in 2002 before moving his license to Pratt Real Estate.
“The market in Medicine Lodge is now down tremendously due to COVID-19 and the sharp decline in oil prices. We are an oil-centric community and county in Medicine Lodge,” Nixon said. “I have an auction house within my building in Medicine Lodge but cannot have an auction with more than 10 people. It is half full of items to sell but my hands are tied until we get past the virus.”
On June 15, Nixon said, he will be able to hold auctions limited to 90 people, with chairs that are spaced 6 feet apart, as per new regulations released in Kansas as the state begins reopening in phases.
“I typically have more than 90 (people) at my consignment auctions,” Nixon said. “By June 30, I can have any number of people I want but still have to have chairs spaced 6 feet apart, which will eliminate two-thirds of my seating. Every second and third chair will have to be removed or moved. I do not have to room within my building to realistically do this.”
Nixon said he believes the uncertainty surrounding COVID-19 will have a continued negative effect on real estate in the future, especially if the country reopens too soon, leading to more confirmed cases.
“My former office phone now rings to my cell and never ever rings, truth to be known,” Nixon said. “Medicine Lodge has a population of 1,900 people and Pratt a population of 6,600, thus the move.”
As the economy recovers in the future and people begin feeling more secure, Maechtlen said, she believes that real estate sales will level out again.
“I would like to thank everyone that has trusted me during this difficult time to buy (or) sell their home,” Maechtlen said. “Pratt has a strong community, and together we will get through this.”
WHAT TO EXPECT
• The rental market is high in south-central Kansas now because of several factors, including uncertainty surrounding COVID-19.
• The real estate market varies by town in price and demand; the price of homes has generally been at least 25% higher in Pratt than in Medicine Lodge, 30 miles south of Pratt, according to John W. Nixon with Pratt Real Estate.
• People are hesitant to show their homes to strangers and prefer to do virtual tours because of COVID-19 fears.