How will real estate respond to the pandemic?
How will real estate respond to the pandemic and Covid-19? What does it mean for homeowners? How does it affect homebuyers? What are the consequences for sellers? How will it affect prices? Where there is pain, there are also opportunities. We will survive.
Homeowners have second thoughts.
Now that they are sequestered in their homes, many homeowners are looking at their homes differently. Now that everybody stays home, is the home large enough? Is the open-space layout really the best design when everybody is home all the time?
When working from home becomes more commonplace, is this home still the right one? Should I be selling and move further away from the urban jungle? Or should they move to another, less populated state? Apparently, Billings, Montana has become a popular destination. With nursing homes, a proven breeding ground for Covid-19, should the next home be large enough for our grandparents to live with us?
Buyers should gain the upper hand.
Buyers will eventually gain the upper hand. For now, the value of Seattle area real estate is holding firm. That’s because inventory is still low and shows few signs of improvement. The daily trend points to more price reductions. As I write this, there are just 82 new single-family home listings on the Seattle Eastside for the past seven days. Price reductions for the same period are 40. The ratio of new listings to price reductions is swinging increasingly to the latter. These price reductions are now spreading to homes priced below $1 million.
Mortgages are cheap if you can get one.
While mortgage rates are flirting with record lows, only the most qualified buyers will qualify. For example, many lenders are no longer offering jumbo mortgages. Also, forbearance is not the same as forgiveness. As a good friend and mortgage expert points out, homeowners should use the forbearance option cautiously.
How will real estate agents respond to the pandemic?
After he initially classified real estate as non-essential, the Washington Governor two days later allowed it to continue with restrictions. These included home showings only by appointment and no more open houses. In response, real estate agents conducted more business online, virtual tours became mandatory, posts on social media increased, and Zoom became the tool of choice for online meetings.
Sellers will need to clean up their act.
Thanks to low inventory prior to the pandemic, even homes offered under less than ideal circumstances and in poor condition would eventually sell. The showing restrictions have changed all that. The most desirable listings were vacant homes. Sellers had to find temporary quarters or go on a vacation while the home was for sale. These sellers were rewarded with multiple offers and offers above asking prices. Going forward, sellers will have to better prepared than ever to attract buyers online and make buyers comfortable when they see the home in person.
What it means when you work with me.
My tagline and promise are What sets me apart will set you apart. What will continue to set me apart is my ability to harness technology in the service of my clients. Nothing exemplifies it more than the custom listing pages I create for my selling clients. Here is the most recent one of a Bothell home that sold 5 percent above the list price. The pandemic has not changed my business model.
However, I will continue to make changes in the way I communicate online. For example, I am discontinuing my mid-month newsletter, News with a View, in favor of informative one-minute videos. Expectations and preferences are changing. Videos posted on social media outscore my written post by a factor of ten.
I can’t argue with that. Here is my latest video from yesterday May 27th, on the number of listings and price reductions on Seattle’s Eastside. To stay informed, subscribe to my YouTube channel.