How Has Coronavirus Affected Real Estate?

Yes, LA County beaches shut down again for the July 4th weekend. But that’s not what this post is about.

I’ve been saying all along that after I see 3 full months of data I might be able to conclude where the Real Estate market may be heading during the duration of and post pandemic whenever that might be.

Well, we now have 3 months of data post “Safer at Home” and while the picture is still somewhat fuzzy, things are getting clearer.

This post won’t be about the numbers per se, that post is coming in the next few days. I’m going to write (rant) about some trends I’m seeing both good and bad.

SALES AND ESCROWS

In most areas sales are still way off both the historical pace and what we saw last year. While they may be up from April, there is no doubt we are seeing the impact of the pandemic and economic shutdown.

On a positive note, I’m seeing a very healthy backlog of properties in escrow. Enough so that if the velocity of new contracts continues there is a possibility that closings get closer to what we would expect to see.

INVENTORY

While a cursory glance might indicate that the inventory is up, truth of the matter is that for properties that buyers might actually write offers on, it is down. That means that overpriced properties and the junk is just sitting while attractively priced listing are getting multiple offers.

I really don’t know what to think about future inventory levels. There’s no question that a number of the potential sellers I might be speaking with want to hold off, others are prepared to go ahead and list their homes now.

PRICES

One of the most surprising things I’ve seen over the last 3 months is that prices have held steady and in some cases have gone up. That is most likely a reflection of the low inventory and low interest rates.

But this may be an illusion.

I think we are seeing a few months of pent up buyer demand hitting the market at once. At some point if the buyers dry up and the inventory piles up, prices could reverse.

BUYER & SELLER SENTIMENT

For those buyers who can still get loans, they are totally engaged in wanting to find homes and except for the masks at showings, things feel like normal.

Sellers still want to get “top dollar” whatever that means and are often unrealistic about the current environment.

BAD REALTOR BEHAVIOR

I see a lot of agents doing stuff that really pisses me off. Nothing is more egregious in my mind than the trend of “walk up appointments” which is a clever way to get around the fact that we are not supposed to be doing open houses.

Not only do I believe this reflects poorly on all of us, it also is a potential public health issue.

The agents doing this - and it is some of the more known players in the area, are very fortunate that the rest of us are nice enough to not report the activity.

I’m kind of curious as to the future of real open houses when we are past the public health crisis.

REALTOR HAPPY TALK

A lot of agents are spouting truckloads of BS to their clients and prospects. I’m all for positive thinking and I get it that people need to make a living (myself included) but try being honest. It really works better.

A lot of the Happy Talk about how great the market is (really?) is because industry Coaches and Brokerages have to sell their customers (the agents) on the dream. I get that. Coaches need the revenue stream and the brokerages need the desk fees.

But stop the talk about “pivot” and other hype and BS. You are just setting yourself up for a major fall.

I was chatting with another agent recently who said the team leaders she works for hadn’t “missed a beat” since the pandemic started. Really? Is that supposed to be a good thing? What kind of human being just keeps on keeping on in the midst of one of the most life altering events in the last 100 years without taking a time out and reflecting on things?

I’m proud to say I missed a few beats to sort things out as to what is best for the health and future of both my family and clients. That may have cost me a few deals. So what?

Agents, here’s a hint. There’s always another deal. If you get yourself sick, you might not get another shot at anything. And don’t put your clients at risk.

V SHAPED REAL ESTATE RECOVERY AND BEYOND

I’ve seen a few charts recently that indicate the Real Estate industry might actually be having a V shaped recovery. Considering that we ground to a halt, yes we are on the right trajectory.

But in addition to the businesses that are closed, the jobs that are permanently gone, the millions of unemployed and with no end in sight to the economic disruption, I don’t anticipate that there will be enough business over the next few years to feed all the licensees out there and support all the brokerages.

I’m anticipating that there will be further Brokerage consolidation and being an agent may become a side hustle for many.

AND FINALLY DISRUPTION

One of the positive changes we’ve seen is more use of technology by everyone.

Many more escrow companies have started to use electronic signing as have lenders.

We’re also seeing a lot more video and 3D marketing.

This may pave the way for further changes that will truly bring the practice of Real Estate into the 21st century.