We’ve been watching the market very closely for our clients. In a “normal” market; when asked, “How’s the Market?” I usually reply with a “depends”. It depends, if you are a Buyer/Seller/Investor/Renter how the Market is doing for you in mind.
Our local market has been a super strong Seller’s Market literally for years now, which has shot our prices in the last 5 years up exponentially. As a result, it’s been great for Sellers and Investors but a lot of Buyers and Renters have been struggling in bidding wars and the lack of homes to purchase.
The law of Supply and Demand at its finest.
Yesterday, I heard in a presentation by Tina Tambor of the Cromford Report (our local authority on Real Estate Market Stats) that due to demand being off the charts with Indexes for most cities well over the 200 mark still; it would take an act of God to see us have price reductions to the point of truly lowering prices asked by Sellers overall and for it to be a Buyer’s Market again. It has not been a Buyer’s market since 2014. In a Buyer’s market, Sellers are more likely to offer concessions and make repairs than when bidding wars and multiple offers are commonplace like they’ve been up until Covid 19 put our market “on pause” as Tina put it yesterday. That said, Real Estate is still happening in spite of the Governor Mandated Quarantine for non-Essential workers to limit the spread of the Virus, that many would call an act of God. The reality is this quarantine is giving Builders an opportunity to catch up on orders for new homes and sales are still happening… perhaps not at the same frenzy pace they were a month ago, but the numbers are still really strong considering…
I see that right now is a great opportunity for the serious Buyers and Sellers to still do business. In a world of technology, we are now doing Virtual Open Houses where people can tour homes using platforms like Zoom or Skype to still see homes without leaving their own homes.
The number comparison from last week of March and first week of April, a couple of things happened… first, we always see a greater number of homes close at the end of the month vs the beginning of the month as that is when people prefer to move, when leases are up, it’s less expensive to close, etc… also homes that closed escrow at the end of March most likely were people who went under contract at the end of February or earlier even, before most people had even heard of the Coronavirus. Some people have taken homes off of the market because they are not comfortable having lookie-lous coming through their homes during this time not to mention the restrictions got tighter in April with the Quarantine.
We would need to see the Quarantine last at least another 3 months minimum before we will see it possibly sway the market index into the favor of the Buyers; which sounds unlikely from what we are hearing today. Obviously, there are no crystal balls, but with rates so low and if you have solid employment still, we’re looking prior to this Coronavirus pandemic; Carpe Diem! It sounds like all expectations currently are that once the Quarantine is over, the pent-up demand will cause the frenzy to commence and with that, we may see higher prices, not lower ones as Buyers may be hoping. Only time will tell and hindsight is always 20/20…