What we have seen and heard in the business over the last month along with observations by other agents and updates from the Cromford reporting. Here are the rumors and what is going on with buyers and sellers:
Will sellers panic and is this a time for buyers to bargain hunt?
This is being viewed as a temporary setback. Unlike the crash of 2008 this is not caused by the Real Estate lending industry. After 9/11, the stock market retreated, but Real Estate stayed stable. Any change in buying habits have been to “wait for now” for financial reasons. This moves the market to become more balanced as fewer buyers now more closely match the low inventory. Supply is still low, and seller’s strategy is to join buyers in waiting it out. Prices are staying stable for now.
Who is impacted the most by the slow down?
The short-term rental market in Arizona was hit hard. With winter visitors quarantined and our spring activities such as car/horse shows, golf tournaments, golf vacations and spring training going away, Airbnb and VRBO bookings dropped and the investors have slowed down. Good news for the little guy who just wants to buy a house and does not like getting beat out by investors. Some of that “hotel” inventory is moving over into housing supply which will help inventory shortage.
In addition, luxury home sales have really slowed down as small and big business have been impacted.
How has this impacted the ability to get financing and close on a property?
Our broker has advised us to allow 45 days instead of 30 for a financed purchase, and at least 30 for a cash transaction. Getting inspectors and appraisers to come into homes has slowed along with getting mobile notaries to get paperwork signed since title companies have cut back on in-person signings. Interest rates are attractive, and lenders are lending. The mechanics of getting the paperwork done has additional hurdles.
What are buyers and sellers doing to cope?
Sellers are still showing houses, but the rules have changed. It is expected to have viewings with buyers masked and gloved, and the seller will open the house for the buyer and then the buyer does not touch. No more pulling open drawers and snooping! Seller agents are also going “virtual open houses” and buyer agents are using skype or facetime to walk their remote buyers through a house. We have seen contracts and offers with buyers who have not yet seen the homes come across our desks.
What must happen for things to return to normal?
When the uncertainty becomes certainty. It was described to me like a garden hose with a twist in it. You still see water flowing out of the hose albeit slower, but when the chink is gone watch the water explode.