Many real estate markets are thriving in the age of COVID-19 and a few are struggling. Where and what you are buying and selling makes all the difference. We have seen heavy activity with younger buyers and sellers. The classic downsizer is more likely to stay on the sideline. And the higher-end homeowners are making moves when the right property comes around.
This spring we saw a record number, for us, first time home buyers at all price points, writing strong offers fueled by historic low-interest rates and motivated by the desire to have more space than a condo or apartment in the city provides. We are also seeing young homeowners taking their work-from-home situations and realizing they can work from anywhere, not just the bay area. They are selling and moving to Tahoe, the foothills, or the north coast of California.
Some of our classic downsizer clients are making moves, while many are waiting until life seems a little less stressful. Some need to move because they need single level homes, or to be near family, or just hate the congestion of the Bay Area. But others, who don’t have a pressing need, are waiting. Rossmoor, as a subset of this market, has seen properties sit waiting for buyers, as many of the attractive amenities are not fully available at this time.
Lastly, our high-value clients are still watching for the right dream home to come available and making decisive offers to take advantage of the current market when it does.
*April numbers represent new and sold listings through 4/15.
Real Estate professionals should always discuss market conditions with buyers and sellers. It is more true in the current conditions as they are changing. Because a home is usually the largest single investment most of us have, we need to have a fact-based understanding of its current value and how that value will change in the months ahead. No investment professional makes promises about future value, but we want to share what we have seen actually happening in real-time.
There are currently two main pressures on the housing market: 1) Limitations on home marketing and transactions, and 2) Constraints on buyers’ financing. During shelter-in-place initially, there was no real estate activity allowed in Contra Costa County. And now only vacant home are really able to be sold, limiting the inventory, which actually has an upward pressure on values. The financing question is broader and we will cover in another blog post. But suffice to say here that at some price points above $1mil, sources for funding are being limited to certain lenders who have the resources. This puts downward pressure on home prices as there are fewer qualified buyers for the time being.
So what has that actually done to home values and sales? We are seeing less overall change in the market due to current market conditions. As you can see from the graph above, there are sellers who have homes to sell and buyers who are approved for new mortgages and are ready, willing and able to buy. March and April typically see a greater increase in new listings and general market activity than January and February. But halfway through this April, we are seeing a similar number of homes coming on the market as the beginning of the year. With a more hesitant buyer pool with less financial resources, prices are holding. The playing field has leveled from a strong seller’s market to a more balanced market. We no longer expect multiple offers that are going over asking prices, but we are also not seeing deep pricing cuts on appropriately priced homes.
If you have specific questions about your home’s value and current market conditions, please give us a call.
“Life is difficult. This is a great truth, one of the greatest truths. It is a great truth because once we truly see this truth, we transcend it. Once we truly know that life is difficult-once we truly understand and accept it-then life is no longer difficult. Because once it is accepted, the fact that life is difficult no longer matters.” Scott Peck, The Road Less Traveled.
Real Estate is difficult and it is not difficult. This has always been true. Right now, more than usual, market conditions are changing by the hour with no stable or predictable future insight. What does that mean for buyers and sellers? Homeowners and potential homeowners? Does that mean it is the end of the seller’s market? Will there be an increase in inventory? Will there be money to borrow? These unanswered questions make the market difficult.
Building our understanding of real estate on a firm foundation reminds us of our fundamentals and makes it not difficult. The market conditions are the same for everyone. We all need a place to live, a place to call home. If we need to sell, we need to sell. If we need to buy, we need to buy. If we need to rent, we need to rent.
We still assess sales and purchases based on the value of the home to us. We can still get from lenders an understanding of what we can afford. We can still inspect homes and review property conditions. We still know what home maintenance looks like.
Real estate is difficult and it is not difficult. Even when it is not easy, it is still simple. When we balance our emotional response to a home with our logical response to the facts, we can live in our wisemind. And that truly is the place we call home.
We hope you and your loved ones are well and staying safe. We, probably like you, are working from home, but we are working. Please contact us with your real estate questions or just life questions. What a great time to reconnect with each other.
By definition, a house or apartment can only be called a home if you feel safe living there. Depending on a specific location there are a number of things to do to help your home be safe. Here is a shortlist of simple things to do.
1) Keep your home well lit: Put in motion sensor lights near all points of entry. This includes walkways, driveways, front, side and back doors.
2) Keep a line of sight open: Keep bushes and other landscape features trimmed back so there are no places to hide near your doors and so that passers-by can see your door as well.
3) Use technology safely: There are lots of places where cameras can be helpful, like your front door or garages, or back yards. Being able to record and store motion-triggered videos for up to a week can be very helpful. Cameras inside the home can actually cause additional risks so use discreetly.
4) Proper use of locks on doors: Use deadbolts with proper installation screws going into the stud and not just into the trim portion of the door. Also, the door into the garage should be locked as well especially if you leave a car with a remote control outside of the garage at night.
1. Furnace It’s a good time to make sure everything will run smoothly this fall when the temperatures drop. Get your furnace inspected and make sure to change the filters regularly. This will help keep energy costs down.
2. Chimney & Fireplace If you have a wood fireplace and use it often, have your chimney cleaned and inspected by a professional. Let us know if you need a referral for one of our vendor partners.
3. Roof & Gutters You should be able to do at least a visual inspection of the roof from the ground. Grab some binoculars to get a closer look or if you’re able and can do so safely, climb on up for a better view. Look for missing, damaged, or loose shingles. Hire a service to clean your gutters or if you can, do it yourself. Remove leaves, nests, and debris.
4. Trees Check for damaged limbs that may break or trees that are too close to power lines or the roof. Call an arborist for professional help.
5. Seasonal Furniture Clean and store seasonal outdoor furniture. Remove and clean cushions. Wash and dry furniture and store in a dry place over winter.