How is the Corona Virus affecting the local real estate market
I have fielded so many questions about the impact of the corona virus on our housing market over the past few weeks that I’ve decided to share some observations about trends we’re seeing in the current local market.
In the months going into the virus, we were experiencing an incredibly strong spring market. In fact, much to our surprise, March turned out to be the best month ever for our Williamsburg office. We posted a record 108 sales, which was up 60% over March a year ago. That’s an important factor to understand moving forward, as the foundation of the housing market is very strong, and it is likely to be what will lead the country out of recession in the coming months.
Fortunately, in today’s digital world, we were able to pivot quickly as the virus situation developed. We worked remotely toget transactions from contract to closing while keeping our clients safe. Getting people closed and moved during a pandemic has actually turned out to be less challenging than we initially feared, as we quickly introduced new technologies such as the ability to make earnest money deposits online.
As anticipated, market conditions have begun to deteriorate in April, and we have begun to see a drop off in pending sales. This is undoubtedly due to buyers delaying plans until after the virus threats have eased, or those who are finding themselveseither furloughed or unemployed and as a result are not in a position to buy right now.
New listings are also slowing down, which is creating even more pressure on our limited inventory market than we had before. Those sellers who are considering a move now (or in the near future) will definitely benefit from the pent-up demand. Even now, we are experiencing multiple offers on manyproperties below the $500,000 price point, and price appreciation for sellers has continued to be strong this year.
We anticipate that once the Governor lifts the stay-at-home order, that our brisk spring market will resume…just a little laterthan normal this year. Obviously, things won’t bounce back immediately, but as the stimulus money is absorbed into the economy putting people back to work and military moves are released, we expect to see buyers re-enter the market in wavesbetween June and the end of the year.
For sellers, there are huge opportunities right now. Low inventory means little competition, and with high demand and price appreciation, the forecast is quite positive for those needing to sell. With all of our virtual platforms, we are able to limit in-person showings, and keep our clients safe during what can be a very trying time.
For buyers, low interest rates will drive demand for the foreseeable future. We expect to see a new category of buyers enter the market as investors begin to shift their wealth from the volatility of the stock market to real estate, with its predictable cash flow and equity appreciation over time. I also anticipate a tick upward in 2nd home sales as many will opt for spending weekends at a river house rather than travelling overseas as theymay have in the past.
The past 60 days has been especially challenging for our mortgage partners, and I anticipate that buyers will need to be patient for some time to come. Guidelines have tightened considerably in reaction to the forbearance agreements, and lenders will have to contemplate how to handle workers who have gaps in employment and credit that has suffered as a result of the pandemic. It is more important than ever to work with atop-notch, client-driven lender right now, and I have several on our team I am happy to recommend.
At Liz Moore & Associates, we are feeling very blessed that our extended Liz Moore family is healthy and still able to support and serve our clients through these trying times. We are all saying prayers for our front-line workers, our government leadership, our community, and especially those who have lost loved ones.
We would welcome the opportunity to speak with you about your specific situation, and whether taking advantage of current market opportunities makes sense for you or not (to include refinancing and investment opportunities). Many of our clients are asking us for our complimentary market analysis which offers a current assessment of how much your home has appreciated recently and what your equity position is. We can accomplish this virtually without the need to meet in person.
Just give me a call!
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Your real estate journey is just that…yours. I get that it’ll be unique. It needs a marketing plan and a committed real estate professional to guide you every step of the way. To talk further, you can reach me via phone or text at 757-254-8136 or through email at [email protected].
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John Womeldorf, Mr Williamsburg