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Hobby School of Public Affairs

The Effects of COVID-19 on Texas Realtors

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鈥檚 series on the impact of COVID-19 on Texas businesses, we look at the Texas Realtors庐. To assess how real estate businesses have fared during the pandemic, the 兔子先生鈥檚 Hobby School of Public Affairs partnered with the Texas Realtors庐 Association to conduct an extensive survey of the association鈥檚 members. Close to 1,200 Realtors庐 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鈥� 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.

 
Key Findings
  • About 18% of Realtors庐 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庐 (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庐 businesses is the 鈥渓ack of inventory鈥� (44%), followed by 鈥渂uyer access to financing鈥� (34%) and 鈥渄ecline in buyers鈥� (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 鈥渁ll鈥� or 鈥渕ost鈥� 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庐 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庐 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鈥� top-3 policy priorities to support the real estate industry are 鈥渏ob creation鈥� (34%), followed by 鈥渁ccess to financing for homebuyers鈥� (27%), and 鈥渆nsuring liquidity in financial and lending markets鈥� (15%).
  • Realtors庐 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庐 are very worried about economic recovery.
  • Despite being hopeful about economic recovery, the pandemic and its consequences have had an impact on Texas Realtors庐: 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.

 

Report

Media Release

 

Research Team

Principal Investigators

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

Researchers

Gail Buttorff, Co-Director, Survey Research Institute & Assistant Instructional Professor

Francisco Cantu, Co-Director, Survey Research Institute & Associate Professor, Department of Political Science

Ren茅e 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

Agust铆n Vallejo, Post-Doctoral Fellow