A Welcome Home
The idea of “home” has never been more important than it is now. Those of us who are fortunate to have homes and have mostly been staying inside have experienced numerous challenges and issues never dealt with before. Many of us are viewing our homes in quite different ways, and values and needs are being re-examined as we begin to more fully realize where the changed perspective may be leading us.
For some, working from the home has exposed the need for a home office space. I have heard some appreciating the value of being closer to family members, and others have experienced difficulties from being in close quarters for such extended periods of time. I have heard recent discussions involving young families who are now committed to moving from their urban condo lifestyle to a more suburban context where there are fewer people in close proximity to each other.
Potential solutions, both physically and psychologically, can be explored to address this new reality. Some solutions could involve a creative space organizer while others might be served by counseling with a real estate agent, and some possible accommodations could be made by changes in the family routine. Accessing whatever help is available to experience more comfort and convenience while staying safe at home is of key importance at this time.
This has also been a period in which real estate prices have adjusted to the sudden change in the world at large. Prices in our area are about 8% lower than they were on average last year, and this has occurred even though the first two months of 2020 were an extraordinarily strong seller’s market. The number of new listings in March-May was much lower, and as could be expected, so was the number of new escrows opened. It is far too soon to guess what the market will do over the next few months, especially considering that there had been a surplus of potential buyers up to the $4 million level, and interest rates for purchase money loans are below 3% which is a near all-time low.
It appears unlikely that we will see the market return to the previous norm any time soon. However, as long as the benefits of home ownership and the demand for housing continues, it is reasonable to suppose that in the long run the housing market will adjust to demand and supply as it has in the past. People will be willing or need to sell and a comparable level of people will continue to seek properties to purchase in the same market location.
Market Turmoil Equals Market Opportunity
In fact, real estate is not as negatively affected as some people might expect. The real estate profession is not at a standstill, and all of the necessary functions are fully operational for sellers and buyers to engage in transactions. Title companies, lenders, escrow officers, appraisers, inspectors, and any other service providers are still very much in business and have quickly evolved online systems and safe procedures to perform their roles in the complex processes as needed.
Real estate agents are fully functioning to provide all of the required activities to assist sellers and to counsel and assist prospective buyers in the process of identifying and successfully purchasing their new home. We continue to help those wanting to lease secure sufficient housing when that service is needed. Of course, we all are following a carefully thought-out set of protocols to assure the safety of ourselves, our families, and of our clients, and the general public! It surely is not “business as usual” – however, we are able to provide all of the essentials for transactions to be completed. The rules have evolved and are continuing to adjust as needed. New forms and procedures have been implemented throughout the country to maximize safety and yet enable the means by which we can do our jobs.
Obviously, the volume of sales has dropped substantially in April, following a strong start this year into late March. Though too soon to know what the near-term future will bring, so far there are about half as many transactions beginning than had been last year at this time. It is taking much longer for loans to be fully processed, so escrows are longer than they had been earlier. However, escrows are moving forward.
Some economists predict that we are only at the beginning of a long-term correction cycle. Others point out that interest rates around 3-4% will enable far more potential buyers to purchase as soon as the environment is more conducive, and that this continuing strong demand will result in a quick recovery. The chief economist with the National Association of Realtors, Lawrence Yun, has projected that by the 4th quarter of this year we will see a much healthier market return. A few of the factors behind this more optimistic view are a much stronger banking system than we had in 2007 when the financial markets collapsed, quick government action last month to help support the economy in many ways, and a combination of relatively low inventory at a time when there are increasing numbers of new buyers entering the market.
Our entire team is available for counseling, general real estate assistance, information regarding a wide variety of online activities that can be done at home during this period of staying at home, or just plain friendly conversations about the world or anything else in general! We have also been able to assist some people with errands or research to find specific services, items or products. We look forward to helping in any capacity that we can.
