Ohio REALTORS offer help to Ohio House Economic Recovery Task Force
Ohio REALTORS Chief Executive Officer Scott Williams sent the following letter to Rep. Paul Zeltwanger (R-54), who is chairing the Ohio House Economic Recovery Task Force, providing a snapshot of the current conditions in the real estate marketplace, proposing possible solutions to bring stability and offering to address the group. The Ohio House Economic Recovery Task Force was created by Speaker Larry Householder (R-72) in early April to explore the steps necessary to reopen the state once the COVID-19 pandemic subsides. The bipartisan task force, which consists of 24 Ohio House members, held its initial meeting last week and is expected to complete its work before the end of April.
Dear Chair Zeltwanger,
I am writing you today to on behalf of Ohio's 33,000 REALTORS. As small business owners and entrepreneurs the impact of the Coronavirus pandemic has been acute, significantly impacting both residential and commercial practitioners. I appreciate the work of the Ohio House Economic Recovery Task Force and welcome this opportunity to share with you my members’ experiences.
The market in Ohio has been healthy and thriving in many areas around the state and the virus outbreak has negatively affected our business, and our ability to help clients find a home or commercial space. The vibrancy of Ohio’s real estate marketplace is critical to our overall economic strength. Our industry accounts for $99.6 billion annually, or nearly 15% of Ohio’s gross state product. Every home purchase puts more than $52,000 back into the Ohio economy through home-related expenditures, construction, and professional services.
Although changes in the market are fluid and ever-changing, Ohio REALTORS has created two economic pulse polls to get a snapshot of the residential and commercial sectors in an effort to assess the impact the COVID-19 pandemic is having on the state's real estate marketplace. The first survey was conducted the week of April 6 and each week we will continue to survey our members to continue to understand the market in Ohio.
Key findings of our initial survey:
- 85% of respondent indicated that COVID-19 has significantly decreased or decreased home buyer interest;
- 84% said the virus has affected the number of homes on the market;
- 48% of respondents said sellers have removed homes from the market.
The top three changes in seller behavior:
- Stop holding open house (80%);
- Buyers using hand sanitizer (74%);
- Sellers not allowing buyers into home (53%).
Commercial real estate has been the most significantly impacted:
- Commercial/Industrial leases have shown a 90% significant decline or decline due to coronavirus;
- 93% of respondents said interest in commercial or industrial purchases have significantly decreased or decreased;
- 76% said the stock market correction has significant decreased or decreased interest in leasing.
The top two impacts coronavirus is having on building practices:
- Tenants working remotely (73% ) and
- More frequent cleaning (66%).
Possible Solutions to Real Estate-Related Market Issues:
Like all other businesses, we believe immediate access to capital is critical for large commercial properties. We recently submitted a letter to Governor DeWine, Lieutenant Governor Husted, and Development Service Agency Director Mihalik suggesting a 10% property tax rebate that must be repaid within the year could be a reasonable solution. Our commercial members have just made a large property tax payment and with the vast majority of their small business tenants unable to pay rent for the foreseeable future, the commercial properties have no cash flow to pay employees and critical trades to maintain the properties. This influx of cash could be a lifeline.
Additionally, a deferral of property tax payment this summer could be another reasonable solution. Again, most commercial properties with tenants have no cash flow, and thus will be unable to pay property tax payments. A state-wide approach to this is critical.
Our membership is continuing to meet the challenges of the current marketplace, understanding that providing professional service to clients reliant on successful transactions is paramount. To that end, our brokers and agents have invested heavily in technology and are proactively practicing using virtual tours and other techniques to respect social distancing guidelines to control exposure and prevent the spread of COVID-19. We would appreciate consideration of a business tax credit for brokerages/agents who have invested in remote technologies in order to comply with the Stay at Home order but also continue to help clients.
Again, this survey is a snapshot of Ohio’s real estate market as of last Monday, April 6, and the market is changing rapidly every day. The 33,000 members of Ohio REALTORS were sent another survey out today, Tuesday, April 14 and will have results within 24-36 hours. For the complete survey results, please see the attachment. Survey results were also sent to all Members.
Nationally, the National Association of REALTORS has conducted a similar survey and although the current market is facing significant declines, the majority of REALTORS® believe residential buyers and sellers will return to the market as delayed transactions following the end of the health crisis. Roughly 59% said buyers are delaying home purchases for a couple of months, while a similar share of members -- 57% -- said sellers are delaying home sales for a couple of months.
Ohio REALTORS stands ready to work with you in helping to rebuild our communities. I would be happy to speak to the Ohio House Economic Recovery Task Force and answer any questions you may have about Ohio’s real estate industry.
Sincerely,
Scott R. Williams, Chief Executive Office, Ohio REALTORS
