When the COVID pandemic first reached the United States in March 2020, no one knew how long it would last and the effect on so many aspects of our lives. People started working from home, practicing social distancing, and doing whatever they could to keep themselves and their loved ones safe. Now, almost two years in, the effects of COVID-19 continue to affect almost every industry—including the housing market and title industries.
Housing Market
The housing market was affected by the pandemic in a way that no one saw coming. According to Fortune, “in the spring and summer of 2021, home prices grew faster than in any period on record.” With mortgage rates at record lows and many companies offering employees a work from home option indefinitely, there is no wonder why this housing market is booming. People are realizing that the big city life—filled with bustling bars, restaurants, and museums—might not return to how it was, which makes small towns and suburbs an appealing option. Now more than ever, people are putting down roots and buying houses with home offices and property to enjoy during a period when they are being advised against being out in certain public areas.
As people ditch big cities for smaller towns, the housing market inventory is rapidly shrinking. Forbes has reported that the “housing supply plunged to its lowest level in history,” making the housing market more competitive than ever. Since the start of the pandemic, there has been a rising cost of building materials and a severe shortage of labor making fewer new houses being built. Forbes continued, “all building materials, from copper to steel, have jumped in cost but lumber prices, in particular, have hit astronomical price increases.” This leaves home buyers with limited options, making it difficult to find a house they want to call home while paying a very competitive price for it.
Title Industry and the Pandemic
It’s important especially in today’s environment to allow people a choice on when and where to close their transactions. Real estate agents and title professionals needed alternative methods of closing that would keep themselves and clients safe during the pandemic. This need created an increased frequency of e-closings. While new options are available the traditional in-person closing is still the fan favorite. Some of the newer available closings are – e-signing with DocuSign on cash sales, or a full digital experience with e-notarization which is available through state approved vendors. Another type of closing is a hybrid where some documents are signed in person with wet ink and the rest are signed ahead of time in a portal with digital signatures. In-person e-notarization, or IPEN, is the process of signing closing documents electronically but not remotely. The type of closing used depends on multiple factors, including the client’s needs, the title company’s preferences, and the lenders guidelines. But it’s a fact that e-closings can save time and add convenience by allowing a client to close from the comfort of their own home and to sign at least some documents online.
With in-person interactions becoming less frequent, clients, real estate agents and title professionals needed alternative methods of closing that would keep them and clients safe during the pandemic. Since CDC guidance are in constant flux and things are changing by the day, there has been an increased in frequency with some form of e-closings.
With the rise the digital transfer of documents and deposits, online security—specifically, protecting against, wire fraud—has been on the collective minds of title professionals. Title companies must follow current best practices in the industry to keep their clients safe from fraud, but that can be a daunting task. Independent title companies have to do their own research to find reliable services they can use to help protect their clients against wire fraud.
The pandemic has dramatically changed our lives and the established practices of many of our industries, and it’s up to us to adapt. It’s unforeseen circumstances like COVID that can end up changing the way the world conducts business.