COVID19 and Real Estate
Let's just go ahead and touch on this subject. People are always asking me "how has COVID affected the market?" Well first of all, it has. It has affected so many ways about housing and blasted us into what we kept thinking was "the future of real estate" but unbeknownst to us, was within a few weeks we saw these major changes. Let's talk about some of these changes . . .
What were some of the numbers? People still need to sell and buy houses. March-May that didn't really change that much for me. While HAR came out with numbers in May that the official number for home sales were down over 21% April 2020 from April 2019. Many saw that as drastic and horrible, but in the midst of a Pandemic and lockdown, 79% of people were still buying. So it's hard to scoff at those numbers, in my opinion.
While I felt very fortunate that my business was (and is) still thriving, the most obvious challenge was lending. I don't think an agent out there hasn't had some kind of issue with lending during this process. Even lenders themselves have been frustrated. There have been so many changes in the midst of Corona that have forced lenders to monitor purchases, jobs, immigration status, etc. of the clients throughout the entire transaction. When we started labeling people as "essential" and "non-essential", all of a sudden "non-essential" became more of a liability in the eyes of a lender. Is that job safe? Lenders then became required to check for their employment status and salary up to THE DAY OF CLOSING. That means for people's jobs that decided pay cuts the day you went to the table might mean starting the terms over again or worse, losing the deal completely. What about immigration status? That has undergone some changes as well. One day their status is approved for a loan, the next day it might not be. Due to the low rates currently, we are seeing a boom in the lending industry of 70%! People are taking advantage of these low rates. But the added challenge to that, is loans are moving slower and instead of 30 days to close, it's closer to 45-60 days. And I would say, that's the biggest challenge most of us have faced. The lag time.
The consumer . . . you. What's going on with the buyers and the sellers? Well many investors are sitting on the sidelines right now to see if there is going to be a market dip to take advantage of foreclosures, short sales, and desperate sellers. Many buyers are out there for a couple reasons; they have to (job relocation or other reasons), they realized quarantining in a 1400 sqft house with 3 kids is a living nightmare, the option to work from home has been extended on a more permanent basis so they want a home office, people leaving the cities to "social distance", and many other reasons. Sellers - this is their time. We have more buyers than sellers and with the added bonus of interest rates being what they are - we are seeing multiple offers on homes. It's very competitive! So if you are thinking about selling, let's talk!
As far as other changes in real estate, now more than ever do we need to become tech savvy. You too. Everything is moving towards "virtual". Now, many people aren't JUST purchasing virtually. But they are putting in offers, only having seen the home through video and pictures, and then checking it out during the option period, when they've already executed the contract and have some time to back out. Welcome to the future!
While I can never guarantee the future of the economy and real estate, I feel good about it. We are living many of these changes right now and I know it will look different going forward. Like anything else, we have to roll with the punches and progress. But I want to say - be patient. Be patient with your kids, spouse, teachers, mentors, mailman, realtor, lenders, and everybody else. We are living some difficult times and we need to rally as a community and just support each other. We are all in this together.