First, I want to take a moment to reach out and find out how you are doing. I hope you are healthy and safe, and if you need anything please don’t hesitate to reach out to me personally. This is uncharted territory for all of us across all industries and we need to be there (but at a distance J) for each other. I’ve spent a lot of time educating myself and thinking about how my clients can help themselves through this event. In light of Governor Inslee’s Stay-at-Home order (effective Wednesday) I had a few thoughts I’d like to share with you:
- Keep yourself and your family healthy. If you own a business, make sure your employees are safe. Get creative to make sure you are avoiding situations where you might become infected or infect others, particularly the elderly. Observe social distancing guidelines and wash your hands.
- Cut your costs where you can. Now’s a good time to cancel those subscriptions or services that you no longer use, especially if you feel like you have some job uncertainty.
- If you are in a tight spot financially, don’t be afraid to reach out to your landlord or your lender to work out some sort of agreement. As a real estate investor and landlord, I would much prefer a pro-active discussion with my tenants and work out rental deferral or forgiveness. Landlords don’t want to be searching for new tenants at this time, and tenants don’t want to be out on the street trying to find a place to live. If you have any questions about mortgage forbearance, please reach out.
Now, how about the effect of Coronavirus on the Seattle real estate market? With the Gov. Inslee’s announcement, brokerages will no longer be open. Brokers can no longer show homes to clients, preview homes, host open houses, take property photos, stage homes etc. We can still conduct business virtually and thankfully a large portion of the business is already done virtually. For those of you who are currently under contract, the NWMLS is in contact with the Governor’s office to understand more specifics around home inspections and appraisals during this time.
Hans’ Take
With the inability to visit with Sellers in person, take photos, stage homes, etc. we will likely see fewer listings come to market in the next 2 weeks. In an already low-inventory market where bidding wars have been commonplace, this introduces greater demand on those few homes currently for sale.
Most buyers need to see a home in person before they’ll write an offer. With the inability to show homes and the volatility of the stock market, many buyers are now sitting on the sidelines waiting for the dust to settle. However, there are also new buyers entering the marketplace each day as lenders are still open for business. Despite the Fed lowering interest rates to near zero, in Figure 1 you’ll find that mortgage rates have actually crept upward in the last 2 weeks (although they are still near all-time lows) due to the sheer demand from new home buyers and refinances. Buyers who feel secure in their jobs are poised and ready to capitalize on these low rates and I predict a flood of buyers entering the market once the uncertainty of the Coronavirus passes.
I don’t have a crystal ball, but my opinion is that Seattle is uniquely positioned to rebound quickly when this eventually comes to an end. It’s entirely possible that this pandemic may drag on for months and affect us in yet-to-be-determined ways. Service industry workers have been hit the hardest with bars and restaurants closing for an indefinite amount of time. But service workers tend to be younger and tend to be renters. Those in the tech sector are still collecting paychecks and Seattle’s historically strong job market may cool down in the coming months, but it won’t evaporate. Demand will remain strong and it will take time for supply to catch up. Once the spread of Coronavirus starts to get under control, I predict bidding wars will be the norm as the number of buyers outpaces the number of homes for sale.
One thing I do know is that this will end. The country (and the world) is going through something unprecedented in this day and age. Historically during events like this, initial panic and fear dominates the headline because of all of the unknowns. As facts and data come out, we get some clarity and some understanding about what happened and where we’re going. Then there is acceptance and we begin to emerge on the other side.
If you had sound motivations to buy or sell before Coronavirus, chances are those motivations are still sound and it still makes sense to buy or sell. Don’t make decisions out of fear, make them out of logic and purpose. If you would like to discuss your real estate plans, please don’t hesitate to call or email me with any questions. I’m always here as a resource for you. Hans.hagmeier@kw.com 503-679-8860
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