"Hi Julie, I hope you are doing well. I cannot tell you how much I appreciate your blog posts. Last week's, "The Naked Truth," in particular, struck me as insightful & powerful. You are SUCH a great Realtor and when that gift is combined with perceptive, cogent, insightful, humorous writing skills such as yours, the result is, well, amazing . . ."
Well shucks; how's that for a fantastic and unsolicited testimonial? (and I assumed no one but my mother read my weekly missives. Mom? Is that you?)
And as much as I'd like to believe that I'm 'perceptive,' 'cogent,' and 'insightful' (the humor is a given in my family), the truth is I'm feeling a lot like the stymied epidemiologists the news sources keep interviewing on the radio and TV with respect to the pandemic and current world events.
Reporter: "Now that people are returning to work and businesses are reopening, how much safer are we with masks, or is social distancing going to be enough?"
Doctor/Expert/Talking Head: "While it's undoubtedly true that masks help reduce our risks of either contracting or spreading Coronavirus, the tests are relatively inconclusive. The ONLY tool we know that actually works is avoiding one another and 'sheltering in place'."
Say, that reminds me of middle school biology class with Mrs. Flowers where we all giggled uncomfortably: "While a condom greatly reduces the risk of getting pregnant, the only way to absolutely avoid pregnancy is abstinence." (You gotta admit she was right.)
While there's no doubt the world is racing as quickly as it can to come up with a vaccine or another appropriate solution that allows us to return to some semblance of our former lives, it also seems painfully clear, that despite the fact that there have, unfortunately, been millions of test cases of infected individuals, there still aren't many answers, or even a clear and consistent path forward. In short, months into this pandemic, they don't know much of anything, and I'm talking about the experts here - not the administration (although they REALLY don't know anything)!
So it bums me out more than a bit to sit here and admit that the one thing I have in common with Donald Trump, is that I too, am not clear on anything, irrespective of the lovely accolades my colleague so kindly sent my way. With news that the pandemic is still in its first wave as it expands across the country, we are looking at months (not weeks) with continued restrictions in place. In the meantime, let's hope that facts - not fear - emerge to help us navigate the unknown and move forward with as much grace as we can muster. (We're going to need it.)
But as I cannot knowledgeably add to the discussion about Coronavirus, I'll do my best to respond to the questions many of you are sending my way with respect to Real Estate . . .
"The real estate market doesn't seem affected in spite of stock market volatility. Why is that?
It has been affected, it just may not seem like it to you, especially if you're trying to buy. However, year-over-year volume is WAY down, which is why Buyers are still having a tough time and why it still appears to be a Sellers' marketplace. However, not everything is selling as swiftly or as easily as we've seen in the past, primarily because we've lost a fair number of Buyers who no longer qualify, not to mention the HUGE hit to consumer confidence. But with respect to the East Bay, until the supply and demand equation shifts in a meaningful way, the market should continue to hold its value in the short term. What it does tomorrow, next week, or three months down the road is anybody's guess.
"Why are some houses selling at the drop of a hat and others aren't?"
I don't know why seemingly excellent houses take longer to sell, while other lesser homes are getting snapped up in a few short days; it's inconsistent at best, but it also has to do with what's affordable ("affordable" being a subjective term. What's "affordable" to me is quite different than what's "affordable" to Bill Gates, or what may be "affordable" to you.) BUT what I do know is that the unattended consequences of canceling ALL Opens is that the two-week time frame no longer exists, which means that a Buyer can walk in and write on a house the very same day they see it (and often do) forcing everyone else to scramble just to keep up. In other words, Covid-19 has reduced our well-defined marketing period into a free for all that is much quicker and far more demanding on Buyers, Sellers and their Agents. (It's exhausting.) If we thought the market was speedy before, it's now far more intense - on both sides of the equation.
So as a Buyer, be ready to pounce, but as a Seller, you'll need to understand that it may also take longer to sell your house due to our inability to expose it as broadly as we once did. We all have to adjust our thinking around time frames, how we work, how we show properties, and how we sell them. It's a whole new world to be sure, so while others are racing to find a cure, Agents are racing to adapt. (Granted, their race is far more important.)
"Do you expect the market to correct in the near future?"
I think it would be naive to believe that the East Bay alone will escape the greatest financial decline since the Great Depression. With historic unemployment, wild market volatility, rising numbers of Covid-19 cases in spite of "social distancing," and no clear end in sight, there are too many unknowns to bounce along blissfully unawares (even if that's your preference). Yesterday, on NPR, an economist suggested that as many as 42% of the jobs that have been lost are NEVER coming back (let's hope he's wrong), so will all the uncertainty create a contracting Real Estate marketplace that was arguably well overdue for a correction PRE-Covid? It's reasonable to assume that it will, just as it already has in many other areas of the United States. Then again, I could be completely and totally wrong.
"Are people writing contingent offers?"
Yes they are. Contingent offers are in play for those houses that have been sitting for longer than three weeks (DON'T attempt this week one). However, once it's clear that you are the only Buyer at the table, your financing can get a whole lot more creative, including tying the sale of your current home to your replacement property. For newer Agents who have only ever worked during the run-up, you'll need to expand your practice and quickly get familiar with this reemerging concept. Let's all be more creative; it can only help our Buyers and our Sellers to achieve their goals.
"How do we compete against ALL CASH?"
Contingent offers aside, there still seems to be plenty of CASH BUYERS out there and for the rest of us, that can be a difficult handicap to overcome. In my experience, Sellers will wait 30 days to finance a house for a significantly higher sales price, but will take the "sure thing," if the offers are close (note the word, "significant"). Cash offers remove the uncertainty that a house won't appraise, that the Buyer no longer qualifies, or that the banks won't fund the loan at the last minute (Ouch). So while the all-cash Buyer can make your situation a bigger hill to climb, it's up to you if you want to climb it. In short, your funded offer will need to be higher to successfully trump the ALL-CASH offer.
So there you have it. Clear as mud? At the end of the day, be smart, be safe, hang in there, wear a mask, be kind to one another, and let's muddle through this together. I believe clarity waits on the other side of of the hill (hindsight is always 20/20) and I'm certain we'll get there one way or another. When? I have no earthly clue, but if you have questions now, I'll do my best to clear the fog, because remember, I'm "perceptive, cogent, insightful, and humorous" Gosh, he left off "good-looking."
How can I help you?
Hey, keep those questions coming. They're totally appreciated, as are your referrals and compliments!
Julie Gardner, has been writing The Perspective for 18 years and has published more than 670 essays on life and real estate.