How will the economic downturn caused by the Corona Virus pandemic affect real estate? Well, in the absence of a crystal ball I can only predict that there will be a slowdown. How deep will the market slide? It is probably too early to tell.
Real estate for the last few years has been easy. Property values have risen steadily, construction resumed big time in many areas of the country, and interest rates have fallen to all-time lows. All the while, lending practices for many types of loan programs became more liberal. Collectively all these factors made selling homes easy.
As a result, many new agents entered the business. Many of them had little business or technical background, just a desire to make some of the easy money that real estate offered. It wasn’t just resale. Many started flipping homes, building spec homes or leveraging multiple investments. I am reminded of the saying, “A rising tide floats all boats.”.
Lately, I have been seeing a lot of posts on social media from agents that were not involved in real estate when the last downturn in 2008 took place. Many are getting nervous. They are wondering what they should do to prepare for the upcoming changes.
Newer agents are going to adjust to a changing market. Just as we did in 2008, they will need to learn new skills, develop new relationships and adapt to changing conditions.
Also, I predict technology will change the home selling process. The way we show homes, execute contracts and move homes from listing to closing will require more skills than just a handshake and a smile.
We are already beginning to see contract wording and addendum being put in place to protect buyers and sellers from the unexpected. We will likely see more changes to real estate contracts. Addendum and clauses will be written to address changes to lending, appraisal and even the disclosure process.
We will adjust. Just as we always have in the past. We just need to make sure the boat stays afloat even if the tide goes out.
Joe Domino is a Realtor® serving the Phoenix/Scottsdale area. Need more information? Or to Search for your next home, visit www.Scottsdale-AZHomes.com