In the last few days, I've received several calls and emails from clients asking about our local real estate market. Clearly everyone's anxiety levels are high and we're all worried about the future. Several of my customers have asked if now is still a good time to put their house on the market, and, should they wait to buy a house?
Even during difficult times, families need to move locations. For those people who are looking to buy or sell a house in the next 3 months, the rules seem to be changing. I wish I had a crystal ball, but we are in uncharted territory on so many fronts. I can share what I know now, and promise to let you know how our real estate market is progressing.
Good Real Estate News:
- The local real estate economy has been very strong for the last 10 years. Home owners have more equity in their homes than ever before.
- Inventory of available homes is at an all time low. In our area, inventory is below four months (industry-wide, six months is considered a "balanced" market).
- Interest rates are still low -- last week, rates jumped up above 4%, but most mortgage people think they'll drift back down in the next 2-3 weeks.
- The panic set-off by the pandemic may be an opportunity to get a good deal on a home (but may also be a negative for you when it comes to selling).
Not So Good Real Estate News:
- While the real estate market doesn't necessarily move in tandem with the stock market, many people think it does and behave accordingly. The recent dramatic drop in the stock market has spooked people and drained the resources of many households.
- Lenders are inundated with refinancing applications, so if you're going to finance your next purchase keep that in mind. Your lender will probably need at least 45 days to pull all the loan documents together. And, depending on the price, your lender may need 60 days.
- Many inspectors, appraisers and repair people aren't working because of the coronavirus, causing further delays in the process. You'll need to be prepared to extend the normal timelines and expect the buyers of your house will need extra time to go through the process.
- Appraisers are expected to start doing "drive by" appraisals, rather than a traditional appraisal where they spend an extended period of time inside a home.
- Most economic forecasters predict a big round of layoffs on the horizon and the unemployment rate could jump to 20% fairly quickly. If people are unemployed, they probably won't be home shopping.
How We're Trying to Adapt:
- We are hyper focused on safety. We've started doing FaceTime or virtual showings for buyers who don't (or can't) travel. We're also working with our partners and lenders in adapting business practices that have traditionally been in person to online or remote versions to help ensure your good health.
- We are working to make sure any showings at our listings take necessary precautions. Even little activities like not touching light switches, cabinet knobs and door handles can help. After showings we're wiping down any surface that might have been touched with bleach, just in case.
As you might imagine, traditionally March through July is the busiest season for real estate in Ponte Vedra Beach. If the graphs and charts I'm watching are correct, Florida may be through the worst of the virus by July. Does that mean life will be back to normal mid-summer? I sure hope so! If that's the case, we could expect a surge in demand for homes by mid-summer. Most real estate transactions take between 45-60 days from contract to close, which would bring us into the early fall.
I hope you know we are here to help. If you have any questions or would like to talk through different scenarios, please feel free to give me a call. I'm trapped at home with my crazy family, just like everyone else!