As we collectively adjust to what can and can’t be done with shelter-in-place orders in effect, you may have questions. While I can’t answer them all, I can offer my perspective on real estate in the San Francisco Bay Area. Here are five things San Francisco homebuyers should know about looking for properties during the coronavirus pandemic.
Can You Buy During a Shelter-in-Place Order?
Yes! While traditional open houses and multi-people tours may be a thing of the past, the market quickly pivoted to virtual showings and 3-D tours. So while you can’t physically tour a property, you can do a real-time walk-through. Many agents have been submitting offers from virtual showings with a short contingency to inspect the house after acceptance, while private showings — with homes accessed via key lockbox that are currently vacant — are possible, if frowned upon for now. Technically, real estate falls into the “essential business” category and creative agents are complying with COVID restrictions while still servicing their clients.
Have Prices Dropped?
Not yet, or it’s safer to say, it’s too soon to tell. It may be that prices for the most coveted real estate properties will continue to see modest increases in the face of the interest rates at their historic lows. Multiple bids are very much still happening, as is an increase in properties going in and falling out of contract. This past week, just for Compass listings, we saw 20 closings. Eight sold for over their list, three sold under their list price and nine sold for either at or just $6000 over their list price (which in Bay Area terms is basically the list price). I’ve include a few slides below that are hot off the presses from surveys taken from the California Association of Realtors for what members are seeing statewide….it’s interesting to say the least.
What About Appraisals and Inspections?
With the shelter-in-place orders, appraisers and inspectors are particular about properties they’ll visit, opting for those that are vacant or accessible via lockbox. That means a huge slowdown in their efficiency and a much slower appraisal or inspection process in general.
Are Closings Delayed?
Banks and lending institutions are navigating a rush of refinances, and everyone is trying to figure out the current work-from-home landscape. But given our current ridiculously low rates and fewer staff members on site, expect some delays. Still, closings are happening, thanks to things like e-signatures and mobile notaries and the intelligent lenders are just adapting to keep things moving. They just aren’t as fast-paced as we’ve grown accustomed to.
When Will Listings Go Back to Normal?
Nobody is sure if there will be a “normal” that resembles what we’ve seen in the past, but we are starting to see an increase in active listings as agents start to figure out how to sell virtually. For Compass in the Bay Area, we had 1134 “Coming Soon” properties as of the date of press. You add that to the other listings that have been on a “Hold” status and the other 50% marketshare that is not Compass, and we’re sure to see more inventory likely into the summer months – a traditionally slow season for new listings.
Experienced agents know all about off-market properties, and being able to search them is what is sets those agents apart from the competition. Sellers may have pulled their homes from the MLS, but that doesn’t mean there aren’t available for sale. Real estate is a local business centered on relationships, and that’s never been more apparent than right now. I can’t say when anything will go back to normal, but odds are good we’ll all be adjusting to a new normal going forward.