What the Pandemic Means for Real Estate in the Coachella Valley
One question I've been asked over the last seven weeks is, "Will there be a surge of foreclosures after the pandemic ends?" While the question is debatable and only time will reveal the actual outcome, I do believe what we are facing in the current economy is very different than the crash of the market in 2008 when we saw a huge sift of short sales and foreclosures.
According to an article published May 11, 2020 in Inman, many chief financial officers at high profile companies don't think the coronavirus pandemic is a repeat of 2008, and I agree for a couple of reasons:
Inventory is Low
Inventory remains low in the Coachella Valley and has been for some time. There continues to be a supply and demand imbalance that we didn't see heading into the recession in 2008 when the Coachealla Valley had more than 8 months of inventory on the market. While seller's may delay putting their homes on the market, we are currently seeing more activity from sellers who are seeing a light at the end of the tunnel in regards to stay at home orders.
Although hesitant, sellers are asking questions about the real estate market and in some cases, they don't have time to wait to sell. Because we have a low inventory, if sellers should continue to delay selling their home, it will keep the prices where they are because of supply and demand. So far we haven't seen prices decreasing, if anything home prices are staying the same or increasing. For example, I listed a property for sale in Indio, CA on March 19 (the same day stay at home orders where put in place for California) and we had an offer on the property within 6 days. Not only that, the property sold for $20,000 more than the last sale of the same floor plan.
Homeowners Have Equity
Many homeowners today have hard earned equity in their homes. Unlike 2008, which was a direct result of the mortgage crisis, this pandemic is a single event that happened, more like 9/11. Many homeowners in 2008 didn't have the equity they have today and if they did have equity, they likely had a balloon payment or a variable rate second mortgage. So many people bought at the top of market, between 2005 and 2006, and didn't have the means to keep up with those payments when the financial markets crashed in 2008. Homeowners have more options today than they did in 2008.
Know Your Options
I think the most important thing for homeowners to know this time around is if you do find yourself behind on your mortgage, know that you have options. What I fear most is homeowners who went ahead with the forbearance of their mortgage could run into trouble down road. If that is the case, don't wait until it is too late to call your Realtor. Work with an experienced Realtor who can help you navigate through your options. Don't lose all of your hard earned equity!
While the final outcome of the pandemic still remains unknown, one thing is for sure. The expertise of skilled Realtors has never been more important.
While we continue to navigate all the unknowns of this pandemic, most important is to stay healthy and stay connected. You may call/text me at 760-799-8460 or email me if you have questions and I'd love the opportunity to guide you through the new market.