The COVID-19 pandemic is one the greatest challenges faced by the United States since World War Two. In response to the rising infections and deaths resulting from the virus, federal, state, and local governments have enacted stay-at-home orders and public health guidelines. These orders have had a negative effect on the economy, especially on medium and small businesses which are at the heart of economic activity in the state of Texas.
In this study, the fourth in Hobby School’s series on the impact of COVID-19 on Texas businesses, we look at the Texas Realtors®. To assess how real estate businesses have fared during the pandemic, the University of Houston’s Hobby School of Public Affairs partnered with the Texas Realtors® Association to conduct an extensive survey of the association’s members. Close to 1,200 Realtors® responded to the questionnaire, which was fielded between May 21 and June 10, 2020. 65% of survey respondents have been in the real estate business for more than ten years, and 88% of them work in real estate full-time. More than four-fifths primarily focus on residential homes, nearly five percent focus on commercial real estate, and 4.2% are property managers.
Like other sectors of the economy, the real estate industry in Texas has been affected by the COVID-19 pandemic and the state and local governments’ measures to mitigate the impact of the disease. However, according to our analysis real estate professionals in Texas have shown a remarkable resiliency and ability to adapt to social distancing guidelines to ensure minimal disruption to real estate transactions.
- About 18% of Realtors® expect their sales to drop dramatically in 2020 in comparison to 2019; 45% think their sales will decline slightly, and 18% believe that sales would stay the same. The remainder 18% expect sales to increase.
- Despite their expectations about sales declining slightly in 2020 compared to 2019, a majority of Realtors® (55%) believe that home prices will remain the same or improve over the next six months. 36% and 7%, on the other hand, expect home prices to decline a little or dramatically, respectively.
- The primary threat to Realtors® businesses is the “lack of inventory” (44%), followed by “buyer access to financing” (34%) and “decline in buyers” (32%). About 12% of respondents think that surplus of inventory will impact their business activities.
- A vast majority of respondents expressed that they have been able to adapt their online business models to the new reality of social distancing: 39% of respondents believe they could conduct “all” or “most” of their business online, and 39% expressed that some of their real estate business can transition from in-person to online.
- Almost fourth fifths of Realtors® mentioned that some of their tenants failed to timely pay rents in April (80%) and May (80%). Moreover, 72% of the respondents whose primary area of focus is property management reported having tenants who contacted them to arrange a payment plan. About 40% revealed that their tenants asked for a reduction in rent, whereas 35% requested rent waivers.
- More than three-quarters of Realtors® foresee the number of foreclosures to increase a little (57%) or dramatically (20%).
- The majority of the respondents (62%) did not apply for the Paycheck Protection Program (PPP) or the Economic Injury Disaster Loan (EIDL) grant. Slightly above 10% of respondents (13%) applied for both PPP and EIDL grants.
- Respondents’ top-3 policy priorities to support the real estate industry are “job creation” (34%), followed by “access to financing for homebuyers” (27%), and “ensuring liquidity in financial and lending markets” (15%).
- Realtors® appear to be more concerned about the economic downturn (58%) than the risk of their loved one contracting COVID-19 (42%). Moreover, over half of respondents are worried about the economy recovery after COVID-19 while 29% Realtors® are very worried about economic recovery.
- Despite being hopeful about economic recovery, the pandemic and its consequences have had an impact on Texas Realtors®: about 32% indicate feeling a high level of stress and 16% have a very high level of stress related to the COVID-19 pandemic. 31% indicate moderate stress level; 12% and 9% have very low and low level of stress respectively.
Kirk Watson, Dean, Hobby School of Public Affairs
Mark P. Jones, Senior Research Fellow, Hobby School of Public Affairs; James A. Baker III Institute for Public Policy's Fellow in Political Science, Rice University
Pablo M. Pinto, Director, Center for Public Policy & Associate Professor
Sunny Wong, Professor
Gail Buttorff, Co-Director, Survey Research Institute & Assistant Instructional Professor
Francisco Cantu, Co-Director, Survey Research Institute & Associate Professor, Department of Political Science
Renée Cross, Senior Director & Researcher
Jim Granato, Associate Dean & Professor
Richard Murray, Lanier Chair in Urban Public Policy & Professor, Department of Political Science
Yewande Olapade, Post-Doctoral Fellow
Savannah Sipole, Research Associate
Agustín Vallejo, Post-Doctoral Fellow