My first year as a residential real estate resale agent was 2010. As a nation, we were just starting to rebound from the economic collapse of 2008, and there was still an air of uncertainty around the housing market that echoes what a lot of us are feeling now. The process of buying or selling a home is already highly emotional, and the uncertain economic state we find ourselves in as we maneuver our lives around the coronavirus pandemic has added to those concerns.
So let’s talk about the real estate market amid this crisis. There already have been changes, and we can expect more changes in the months ahead. We didn’t see a huge shift in the market when California Gov. Gavin Newsom issued his shelter-in-place order March 19. Homes were still going on the market, buyers were making offers and escrows were closing. The industry began making changes in procedures — developing different ways to have notaries witness the signing of loan documents, how final final documents are signed, using 3D photos in listings, and doing virtual open houses. Zoom has become one of the industry’s most important tools, with agents using the videoconferencing app for buyer and seller consultations.
Looking to the months ahead, the industry will be affected by a reduction of listings. As of late April, we already were seeing about 25 percent fewer homes coming on the market in the Sacramento region, but the market is shifting back and forth, so it’s hard to know where it will be by midsummer. But, remember, for a variety of reasons, people will still be selling homes, and buyers will still be purchasing, especially with historically low interest rates. Continued demand and reduced inventory should mean few price reductions. The job market will play a big part in whether buyer demand remains high, and record unemployment could become problematic to the housing market if it continues through the year.
Although, by most accounts, the crisis is leading to a recession, we don’t expect the housing market to drop to the level that caused so much financial distress in 2008 and the following years. That crisis was caused by predatory lending, and homeowners today have a lot more stake in the game and will want to ride this out. One thing history tells us is that if prices go down, they will go back up.
For those interested in buying or selling this summer, here are tips to help you on your journey, especially during an uncertain market.
1. Declutter your home, both inside and outside. Spruce up the outside, and make sure the inside is clean.
2. The best way to give your home a makeover is with a new coat of paint, inside and out.
3. Professional visuals are a must, including photos, 3D photos, videos and virtual tours.
4. It’s important to have home, pest and roof inspections done. These can be done safely, in terms of social-distancing guidelines.
5. Make sure your disclosures are complete before listing.
1. The most important thing to do in any market is to have underwriting approval prior to looking at homes. Know what you can afford, and stick to properties in your price range.
2. Be flexible. With fewer homes on the market, you may not be able to get everything you wish for.
3. Make sure your down payment and closing-cost funds are secured.
4. Discuss with your real estate agent the steps to becoming a homeowner. (There are many.)
5. Remember: location, location, location.
If you follow these tips, buyers will know the condition of the property before making an offer, and the likelihood of a smooth closing for both parties will increase dramatically. Never forget, the process between buyers and sellers is, at its core, collaborative. Things will proceed better if there is an undercurrent of teamwork.
If you’re looking to get into the market in the coming months, either as a buyer or a seller, the very best advice is to find an agent who you trust to represent your interests. As a Realtor and homeowner, I know how difficult and emotional the process can be, so you need to work with someone with whom you feel comfortable discussing your needs and wants. Open communication between you and your agent will be even more important during these uncertain times to protect you and your money.
In 2008, the most similar time economically to what we’re going through today, a lot of people were scared. So many were going through similar circumstances — losing jobs and potentially homes. If you are feeling uncertain or queasy about the road ahead, know that things will get better. Even if you have to move when you’d rather not, remember, it’s just wood. Your safety and your family’s safety are paramount, and the memories that you put into your home will follow you wherever you go. These are difficult times, but they’re also times where we all have the opportunity to rise above our differences and be good to each other. And that extends beyond the real estate industry.
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