As news stories and reports about CO-VID 19 overrun our news feeds and emails, Ken and I are starting to get a lot of questions about how Coronavirus may impact our local real estate market. Although it’s too early to tell what the long term implications will be, there are some things we should all keep in mind as we look to the upcoming months.
What should consumers and homeowners know now about our local real estate market?
The real estate market this year started out very strong with very high buyer demand, the likes of which we saw several years ago when the real estate boom was in full swing. We saw lots of multiple offers for the best homes that were in the best condition.
As of this week, buyer demand has started to wane. Over the last weekend, we had buyers decide they would like to postpone their showings and we saw weaker buyer activity on on our listings. We have heard of some sellers having apprehension about buyers coming through their homes. It seems likely buyer and seller activity will continue to slow in the upcoming weeks.
While activity may slow, there will be buyers and sellers in the market out of necessity, and after the dust settles a bit there should be some opportunities in the market for investors and regular homeowners alike. So let’s talk about practicalities.
What should you know if you are buying a home?
If you are out on showings, maintain as much social distancing as possible, bring hand sanitizer, and wash hands after leaving homes. Also, we won’t be shaking your hands or giving you a hug for now! It is best to rigorously vet homes on the front end by looking at the online listings carefully and doing drive by’s of homes and neighborhoods so that you can only to go see homes that might really work for you.
When considering homes for purchase, make sure to have a long term plan in case you need to hold on to the home longer than originally expected. If there is a market down turn, be ready to rent out the home, rather than sell, should you need to move on from it. Ken has a lot of experience helping investors in the purchase and owning of rental properties so don’t hesitate to reach out if this is of interest to you.
Try to do as much online as possible. Wire funds rather than deliver checks (and always make sure to verbally verify wiring instructions prior to wiring any funds). Sign documents electronically as opposed to meeting in person. Virtual showings and 3D Matterport tours will become very important in the upcoming weeks as they could allow buyers to view homes virtually.
For our part, we will be advising clients to write contracts with longer timelines to address bumps which will likely come up and to give inspectors, appraisers, and lenders extra time to complete their essential tasks. We may see impacts from 3rd party vendors and parties tangential to the real estate transaction like homeowner’s associations, title companies, and contractors.
In uncertain times it is even more important to get in-depth details on what all parties need at the front end of the transaction. We will be figuring out timelines and contingency plans for both sides of the transaction in case adjustments need to be made. Information is power.
What should you know if you are selling a home?
Wipe down surfaces when you come home after showings and open houses (this may be a good time to forgo doing open houses). Consider a sanitization station at the front door, asking buyers seeing your home to use hand sanitizer, booties over their shoes, and asking them not to touch unnecessary surfaces. If you are a seller and would like help with this, of course, let us know.
Know that contracts may be a bit shakier than in years past as buyers are concerned and apprehensive. Make back up plans in case the contract for your home falls through.
For our part, we will be vetting agents and buyers with an extra degree of caution. Collaborative, creative agents will be able to work together to help both parties get to closing, whereas more combative agents could be much more difficult to work with. We will also be carefully vetting where buyer’s funds for closing will be coming from. If they are hoping to take money from the stock market for their down payment, that will be a shakier proposition.
With regard to our general market, know that this area and the real estate market weathered the financial storm of 2008 and 2009 rather well as compared to other parts of the country. Our local economy is varied and strong. Like any market, prices will go up and down as buyer and seller demand waxes and wanes. If you think you see real estate prices dip in the upcoming months, don’t panic. When in doubt, give us a ring and we can help you assess your personal situation and help you make contingency plans if needed.
It’s important to us to be there for you! Please don’t hesitate to reach out for real estate advice or just for a chat. Ken and I will be here, social distancing with our pups, going on long walks, and donating to our local food bank whenever possible. We will continue to update you with up-to-date market info and stats as they become available.
Thinking of you all and hoping you are staying safe and healthy-
Allison and Ken