Market Update: How Is COVID-19 Really Affecting The Housing Market And What To Consider
Historic times are upon us as the Coronavirus has spread around the world creating so much uncertainty for all of us. Impacting every industry, and real estate is no exception. Now, the big question is “how?” How is COVID-19 impacting our market and industry? We’re here to update you on how the Coronavirus and the “Safer At Home” act are affecting the greater Long Beach market and Southern California in general, as well as offer some industry insight during this rapidly changing situation. Boots on the ground, here is what we are seeing and experiencing.
The Local Housing Market
While many sellers’ first impulse is to pull their listings from the MLS, either withdrawing them temporarily or canceling them completely, here is something to consider. There have been 82 homes canceled, withdrawn, or put on hold since March 1st in Long Beach alone. We are seeing the majority of these in higher price points. We’ve also seen a number of closings in the past two weeks as well, and fewer sellers are listing their homes during this time of uncertainty.
Our team closed two escrows last Friday and opened three new escrows. Why are we still busy? This has created an even tighter level of inventory for buyers who are still actively looking as they need to move and because we are continuing to be proactive. As of this writing, there are 361 active single family homes and condos in Long Beach. Before the pandemic took hold in the United States, that number hovered in the mid-400 range.
Active, motivated buyers are still looking, requesting showings and submitting offers, thanks in part to record low interest rates. Seasoned buyers who are locked into their rates from earlier this year are trying to solidify a home in order to benefit from the dip; while new buyers may be finding that interest rates have increased slightly from two weeks ago. Mortgage lenders report to us that rates are fluctuating not just daily, but sometimes hourly. It’s imperative, more than ever, that buyers have all necessary documents in the hands of their mortgage broker. Many listing agents and sellers are working together to allow buyers and their agents to see their homes safely utilizing technology. Home inspectors are still working as are mortgage lenders. We are simply finding innovative ways to navigate the home sale process.
There have been 190 homes in Long Beach that have gone into escrow since the beginning of March, ranging from a median list price of $619,000 to a high of $1,849,000. Some of these homes are still receiving multiple offers, which we were seeing a lot of before the pandemic crisis. At this point we cannot surmise how this crisis is going to affect sales prices. We will have a greater understanding of how our median home price has fared during this historical time once the homes currently in escrow close. What we do know: this may be an excellent time to seek out a listing that has been on the market for a while. Sellers who are serious in wanting to move on may be more motivated than ever to make a deal happen.
We are also seeing several new listings come on the market with a healthy number of showing requests and interest. We are recommending to our clients that if they are serious about selling their home it should be priced competitively and as marketable as possible because a great first impression online is very important. Our office has received several calls from buyers who are looking immediately to move to Long Beach from other areas; we believe this trend will continue, and will help keep the housing prices stable. In the meantime, many of these future buyers are seeking out short term rentals, so we’ve seen a tightening of that market as well.
Innovative Ways of Doing Business
The California Association of Realtors has mandated that we cannot hold broker tours, and that we should cease all open houses and showings as well. Now more than ever we are enlisting our technological tools to offer virtual tours of our listings as well as conduct showings and appointments via FaceTime and Zoom. In person showings are on hold for the time being, but we are finding ways to allow buyers to tour these listings virtually and effectively. We are committed to staying in front of this and finding solutions to navigate the obstacles we are all facing. I’m happy to report that it’s working as we received two offers on one of our listings this week alone.
Although it’s reasonable to be concerned about how restrictions will impede the sales process, it doesn’t mean home prices will nosedive like they did 10 years ago. There is currently a severe housing shortage and according to Realtor.com’s chief economist, there are many more eager buyers than reasonably priced properties for sale.
Reasons to Sell Right Now:
- Limited inventory of homes
- Low interest rates will keep serious buyers on the market
- If you have a good house that is priced right, you can sell it
- Now more than ever people have the time to look at homes online
Pro tip: If you were planning to sell your home, use this extra time at home to start preparing it for sale. Remember, a great first impression is so important. Find tips on prepping your home for sale here.
The truth is, this is an unprecedented time for all of us. Our team at The Oriana Shea Group understands the nuances and we are here to help you make the best decision for you and your family. Everyone on our team is working remotely and safely from our homes. We are still meeting with new clients via Skype, Zoom and FaceTime, taking listings and coordinating showings for buyers safely and responsibly. Our lenders and inspectors are also still working. Please stay connected, and let us know how we can help you right now. We will get through this together, and come out stronger for it.