We were all looking forward to a banner year in real estate. The numbers were great! My office had broken records from last year, and we were all discussing sales and listings. Larchmont property owners were enjoying multiple bidding situations. Then, with COVID-19, people losing money in the stock market, sales dropped off. The First Quarter market report 2020 reflected that .
To best explain what has been happening with real estate, I must first mention that as of March 22nd, there was an Executive Order by Governor Cuomo as follows:
“As of 8:00 pm tonight, March 22, an Executive Order (EO) by Governor Andrew Cuomo effectively restricts real estate licensees from working outside of their homes. Real estate brokerage and many other businesses were not designated as essential by the Governor in the EO.”
That Executive Order meant that until further notice real estate licensees were precluded from holding open houses, showings and in-person listing presentations for example. We were able to communicate with our current clients and customers but no ‘cold calls’ or reaching out to potential future clients. Closings, appraisals, inspections, everything was in flux and as a result, it was obvious that unless a buyer had seen a home, was negotiating no same, it was going to be that much harder to purchase and or sell a home. Zoom meetings became a way of life! My office is phenomenal, and (as an aside), we had an “Intro to Meditation session this morning, a virtual yoga session is scheduled for Wednesday, and of course all interspersed between market updates, and how we can continue to assist our clients to their advantage. We still have weekly office meetings via Zoom, and they are all greatly beneficial.
On April 1st residential home and commercial office showings were deemed essential along with home inspections, residential appraisers. (emphasis added) all with caveats. As of April 3rd, only virtual showings were allowed. Meaning, an agent could enter a vacant home with a mask and gloves, and with the seller’s written permission show the home to their client via Facetime, Skype or through videos taken at the house. Those listing clients that already had videos of their home, or who had the Matterport 3D platform tour were obviously at a greater advantage as potential buyers could still view their home on the internet. ”
Zillow reported that the last week of March, compared with the average from February, saw a 408% increase in users making 3D videos for homes on the market that aim to immerse prospective buyers and recreate the feeling of touring a home in person. Such videos have actually been a nationwide feature on Zillow’s website since 2019, but are no longer a “niche product,” Olsen says. “It’s what you need if you want to keep getting your home through (the sale) process,” Olsen says. (U.S. News – Devon Thorsby)
As of April 1st, purchasers were allowed to be present with an inspector with his/her permission, but that changed as of April 9th and purchasers were no longer able to be present. Home Inspectors/engineers were requested to conduct the inspection via Facetime, etc. with the purchasers. There are now ‘virtual’ closings. I have heard stories of a buyer being in one room, their attorney in another, and a bank’s attorney was in the driveway of a home at yet another,
Accordingly, it was further confirmed that “real estate services shall be conducted remotely for all transactions”. Licensees must utilize alternative methods of conducting business to avoid person to person contact with members of the public. NYSAR is unaware of any scenario where a licensee would be “legally necessary” to have in-person contact.
That then meant that everything was required to be performed digitally and virtually. SO, it was then no surprise that real estate companies started to furlough its workers. Amongst those companies were Compass, Redfin and Corcoran. Barron’s article April 17th regarding Compass. TechCrunch 4/17/2020
Not so for Julia B. Fee Sotheby’s. I have always thought of the company being a family run business as it emanates that aura. I can email the CEO and President, Mr. Paul Breunich, and I will get an immediate response. All of the executives are accessible, always. So, while our sales dropped these past few weeks, my company has been working towards creating a total virtual and digital platform. I should rather state they are completing that goal as the company has been working towards such a platform for a long time now to make it easier for the public and agents alike.
The interest rates are really low, and so the real estate market was never an issue this year. It is the accessing of those properties, and the marketing of same that has now become the issue. Sales are now down on average 32% with my company between the Connecticut and Westchester offices. Property Shark posted a 62% sales drop this year over last year in the city. In the same article, it did mention that sales prices were still positive although I have heard that some buyers are trying to renegotiate their sales prices in the city.
It all portends I believe to more city dwellers seeking the suburbs for a safer clime, and so we are on a wait and see projection right now. It all depends upon supply and demand as always, and once the real estate market opens up, we all know there will be a flurry of new listings as there are people who still need to sell. Interest rates are still so very low! As of today, Bankrate is posting 3.53 for a 30 year loan, and as little as 3.03% for a 15 year fixed mortgage loan. A client who is also an Actuary has commented on real estate being THE best investment when the stock market declines. On that note too, the stock market shows promise also but not until the third quarter. “A double-digit rebound in GDP growth in the third quarter still seems like a decent bet, but it won’t recover all the lost ground,” Ian Shepherdson, chief economist for Pantheon Macroeconomics, wrote in a note Sunday. Shepherdson’s anticipation is for a 30% annualized drop in GDP in the second quarter, a margin about in-line with many other economists’ grim outlooks for the quarter.” Yahoo Finance.
Chase Bank has also changed its requirements. For a jumbo loan for example, they used to require one year’s mortgage amounts reflected somewhere – be it a 401-K, savings, etc. Since COVID-19, they are now requesting 9 months but 6 months must be liquid funds. (readily accessible). Some banks are requesting a minimum of 20% down (80/20 loans).
My associates all have properties they are waiting to bring onto the market, and when I speak with other agents in different companies, the same is true with them too. In some areas, the agents plan on introducing the homes at a lesser price to be as competitive as then can. The key is to have the house look as great as possible so now is the perfect opportunity to declutter, and get the house and grounds ready!
The areas that have always been in demand such as Rye, Larchmont, Scarsdale will probably continue to do well, but it might take a little while longer while the stock market rebounds, the different price points for corporations and people to feel more comfortable with the process. Web portal visits dropped in March on Zillow and Curbed.com which indicates the lack of enthusiasm right now. However, I did see the unique web visitors increase over the Easter/Passover weekend so that was positive also. Unemployment has played a great part also in real estate interest thus resulting in those lower portal numbers and unique visitors.
Many sellers might delay listing their homes until the market rebounds somewhat. Buyers might wait also to sense some sort of returning normalcy. To the home sellers who have had their homes on the market, we have urged them to continue to do so. ” While some may be concerned about the Days on Market ticking upward on their homes as real estate transactions potentially slow down, we feel the increased exposure these properties will receive before a virtual audience at this moment in time should outweigh such concerns. The rental market too is receiving considerable attention as people temporarily leave cities for more secluded refuges, according to multiple news outlets. “ (Paul Breunich, CEO & President William B. Pitt – Julia B. Fee Sotheby’s International Real Estate).
One thing is for sure, showing homes will be surely different in the upcoming months, and it is always a challenge that we as Realtors are here to assist with. I believe the seasonal months have changed this year, and the spring market will evolve into a later summer market for all.
I would be proud to be at your helm during this process in this evolving world.
Gay Rosen, ABR, CBR, CDPE, CRS, GRI, SRES, GREEN,
Licensed Real Estate Associate Broker
Westchester is GREAT!