As America is in our 4th week of quarantine I have been getting a ton of questions lately on the state of the real estate market. Are people still buying and selling? How are people buying and selling? What do we expect to see when the shutdown ends? I'll answer all these in the below and more.
It is no question that the economy is being affected from the current government shutdown to curve the Covid-19 pandemic. Thursday March 19, 2020 Pennsylvania Governor Tom Wolf ordered all non-life-sustaining businesses in the State of Pennsylvania to close which includes most real estate services.
How is this affecting Pennsylvania real estate?
All in person real estate services ie: touring clients through homes, in person listing/buying consultations, open houses, and any other face to face service has ceased until further notice. In addition closings will not be happening at real estate offices anymore. Closings are being held remotely which is a welcomed change in the industry and should make life easier moving forward.
How is this affecting the Pennsylvania real estate market?
New listings and new under contract homes have gone down this April compared to last April. Many people believe this is a temporary issue and are waiting to list until after this is over. Spring is one of the best times to list your home on the market. The urge to buy has not wavered. People are increasingly looking to buy and sell as we get deeper into Spring.
The Opportunity for Sellers -
We have seen incredible price increases in properties of the past several years. The market has been very competitive for buyers. While demand remains high for new listings, inventory is lower compared to last year at this time. For sellers who are listing now your competition is greatly lower than in normal Spring markets! The urge to buy is still high so capitalize on this opportunity while it lasts! I will later touch on how sellers are listing their homes today and what has changed.
The Opportunity for Buyers -
"Be fearful where people are greedy and greedy where people are fearful" - Warren Buffet. There is always opportunity in any market and there are some great ones for buyers in this current market. The Spring market is one of the hottest, which I touched on earlier usually we see multiple offers on listings, bidding wars, and homes going quickly. I was seeing that this Winter which had been uncommon. Which to me indicated this Spring was going to be extremely competitive for people trying to buy a home.
Since buyers cannot tour homes right now people are waiting until they can tour homes to begin putting in offers. There are great homes on the market right now that people can make offers on without competition, getting bid up, and running into having to make concessions they normally would have to make. I will touch on how buyers are doing this later.
What we expect to see after quarantine ends -
As I said earlier the urge to buy and sell is still as it would be in any Spring market and seems to be growing each year. Once the government shutdown is ended we expect to see a surge of tours, multiple offer situations, and properties getting bid up.
How are buyers still making offers?
People still need to sell homes and move, buyers are taking advantage! Buyers know that their dream home won't wait for them and are making offers sight unseen which I know seems crazy but it is not the typical sight unseen offer. These contingencies make things safer for buyers.
30 day inspection contingency
An inspection contingency is a window of time that allows the client to bring an inspector in and learn more about the home. This protects the buyer and allows them to negotiate repairs or back out of the deal. Usually this is a 5-10 day window. However clients are doing 30 day inspection contingencies so that once the shutdown is lifted they have the opportunity to see the home and make sure there are no surprises.
PAR (Pennsylvania Association of Realtors) COVID-19 Form
"This form allows the buyer and seller to agree that in the event performance becomes impossible or impractical either party can unilaterally invoke an automatic extension of all deadlines (the default is 30 days) that have not yet passed, including the settlement date. This form is basically a pause button. It gives the parties a set time to figure out a backup plan without being under the gun with immediate deadlines, but it doesn’t change anything else in the agreement". - PAR.Org
Buyers and sellers still have to make a good faith effort to close on time!
It is a great resource for buyers along with the CTA which is a change in terms addendum. Both will cover most changes that would need to be made.
How are Sellers still listing properties?
Video Tours - Video tours are not new but are definitely now a vital part of listing properties today. Since clients cannot tour properties right now video tours do a great job of capturing most of what you would want to know about a property.
Virtual Tours - allow clients to virtually walk through a property online and something I think will be the standard for every property in the future. It even allows you to measure walls and floors. This is great because for anyone looking at homes often times pictures can make tiny rooms look huge. The How Group's Jacci Neerland utilized this for Her listing check it out below:
Click for Virtual Tour of 800 Belmont Ave
FaceTime tours - We may not be able to do in person tours but sellers can walk people through their homes over FaceTime.
Prerecorded open houses - Agents are prerecording tours through homes and posting them on Facebook/Instagram live while answering guests questions over the internet.
If you have any questions about buying or selling in this market get in touch with me @ 484-620-7798 / Matt.firstname.lastname@example.org / or you can go to the contact form and I will reach out to you!