We hope this blog post finds you well. Our family is doing well. Alyssa had to cut short her semester in Spain, but it seems everyone has had to give up something during this time. We know many families are struggling with having kids at home while also having telework. As we navigate through all this, we have no more medical advice than what you have heard, but we do have a few thoughts on the market and some statistics you might find interesting.
After 15 years in the industry, we’ve seen the best and worst of the markets, including the financial crisis in 2008 (the year John started in real estate!). What we’ve learned is this: there is always opportunity. This may come in the form of locking in low rates on long term mortgages or purchasing at discounts. The economic fundamentals that caused the crash in 2008 are not present in our current situation. The hope is once the coronavirus is contained and people are back to work, the markets will settle down to normalcy.
One thing that is becoming clear is that buyers are going to have some opportunities in the coming weeks. Interest rates, while erratic, continue to be at all-time lows. What has changed, however, is that the number of showings has fallen dramatically—while at the same time, the number of overall listings is way up from 2019. This will provide some great buying opportunities. If the virus continues on its same course, we would expect to see lower prices in 3-4 weeks.
In addition to homes that are For Sale or Coming Soon, we are now also keeping an eye on those homes that have recently left the market. A dramatic rise in the number of homes that have been Withdrawn, Cancelled, or are Temporarily Off the Market occurred in the past week. We feel certain that the owners of most of these homes still want to sell but are uncomfortable about letting people walk through their homes at this time. For these health-related reasons, we are setting up Virtual Tours and other video-based applications so our buyers can see these homes.
For buyers confident in their financial position and employment, taking advantage of low interest rates and potentially lower prices could have terrific long-term benefits. If not, then it is probably best to wait. We are offering Facetime showings for buyers who are wary of being out in occupied homes right now. Vacant homes are much less complicated.
For sellers, Open Houses are suspended for now. We are taking extra precautions on who we are allowing into the homes. We are asking the same questions of buyer’s agents you may have encountered elsewhere: Is your buyer sick? Have they traveled anywhere in the past 14 days? Do they have a cough? We are asking buyers to not touch anything in the home.
How will the market treat sellers right now? Uncertain. For those homes that are in good condition and show well, there are still more buyers than sellers even with the recent trends, so we would expect the nicest homes to move quickly. However, there may be fewer offers than would have been received a few weeks ago. Other factors are also coming into play. For instance, the military has put all transfer orders on hold. So servicemen and women who would normally be looking to buy around this time must now wait a few months.
Time to Invest
For investors who did not lose a great amount in the stock market fall, we expect this to be a great time to buy. The biggest difficulty investors have faced recently is finding cash-positive homes. With the low rates and the possibility of less competition, more of these homes will fit the financial requirements of investors. Our daughter, Shelby, just settled on an investment property. It had been Under Contract but the buyer backed out because she was uncertain that she still had a job. Shelby wrote an offer the same day it came back active. The seller took her offer which was about $10,000 less than the previous offer. Why? The seller had already moved and didn’t want to be paying two mortgages. We arranged for a quick closing to meet this concern. The seller was also uncertain as to what the coronavirus would ultimately mean to the market.
MARKET STATS IN THE LAST 7 DAYS for Washington DC, Arlington, Fairfax, Falls Church and Alexandria
- 542 new listings (3100 total active properties)
- 570 properties went under contract (down from 610 the week before)
- 390 properties were put on hold or taken off the market
- 641 properties closed
This shows us that for every property that went under contract there was less than one new property to replace it. Also, with an additional 390 properties being pulled off the market that means there are fewer available properties now than one week ago. However, there are also fewer buyers as the number of properties going under contract fell from the previous week.
Shopping for a great mortgage rate is more important than ever. Some lenders are not lowering rates since they have more demand than they can handle. As a result, rates actually went up a little this week and last.
Mortgage Payment Troubles?
If you are someone you know are having mortgage payment troubles, please reach out to us for help. Also, here is a good website on the subject: https://www.knowyouroptions.com/covid19assistance.
We are members of a real estate consulting firm, Buffini and Company. Click here to listen to a podcast with Dr. Lawrence Yun, the chief economist at the National Association of Realtors, where he gives his insight on housing during the current crisis, with comparisons to 9/11 and the Great Recession.
In all this, know that if you need anything at all, please don’t hesitate to reach out to us. We have a lot of connections not only in real estate areas like the contractor, mortgage and home improvement industries, but also in health care and government. We are happy to help connect you to people who can help. Or if you need help or know someone who needs help getting groceries or other daily needs, we are here for you in that way too.
Take care and stay well—we’ll get through this!