According to Meyers Research, Google searches for “Should I buy a house” doubled in March over February 2020 and climbed to an all-time high last week. In fact, thanks to our new normal of virtual sales meetings, I realized there are in fact many quite resilient buyers out there and, believe it or not, multiple offers still being seen — gulp — particularly in the coveted single family home, entry-level price point (which for the San Francisco Bay Area falls into some version of the three bedroom, two bath, with parking under $2,000,000 price range).
A New York Perspective
COMPASS Chief Evangelist and all around class-act Leonard Steinberg of Manhattan shared his seasoned thoughts to those of us subscribed to his daily newsletter. They felt relevant enough to repost today in their entirety:
I am one of those people at COMPASS who lived through the terrifying 9/11 attacks in New York City in 2001. Washington DC experienced a similar level of shock and awe. And the whole country realized we were at ‘war’. In many ways I see some similarities to what is happening right now.
Of course this is different in many ways. I feel the real ‘attack’ on the USA hit us last Wednesday, March 11th….or 3/11. For many, the first reaction to the news that this virus was real and deadly and spreading fast was a sense of shock or denial. Like 9/11, the full extent of the moment took a while to sink in. Then it did. At first we had to make urgent plans for those directly impacted while figuring out emergency supplies and plans for ourselves to survive potentially many weeks in possible isolation. This was very different in different parts of the country, as it is today. Then government stepped in with relief/stimulus after the equity markets had crashed.
Physically the similarities are not the same, but as it relates to the real estate industry, I suspect a similar trajectory could ensue. The brokerage community initially reacted with a sense of panic/urgency to get markets moving again. These efforts — especially in the hardest hit areas like Manhattan — were mostly futile and it read badly. The very few buyers willing to transact were bottom-fishers and opportunists. Some sellers reacted with desperation. They were proven later to be misguided. Panic-anything is best avoided in real estate.
Given some time to absorb, reflect and heal, combined with a wave of new data and intelligence to help inform their decision-making, the consumer awakened from their slumber three months later. In December of 2001, green shoots emerged and by the time January 2002 rolled around, the market EXPLODED into activity-levels never seen before. The combination of knowledge and information, lowered interest rates, massive stimulus — and time to heal — not to mention pent-up demand fueled a wave of activity and the real estate markets recovered fully.
Will the exact same thing happen with this Coronavirus 3/11? No-one knows. But I do feel that given time, based on what we are seeing happening in other affected countries, this possibility does exist. The world is actually (possibly for the first time in a long time) united against a common enemy. More recently there is a new wave of acceptance and massive, bold plans coming that could suppress and minimize the spread of this virus. Global and united efforts are underway for more effective treatments: imagine if we could more effectively treat the virus so that it does not turn deadly and require hospitalization? A vaccine is many, many months away.
When we look back on this moment in a few months, I truly hope my 9/11-3/11 comparison plays out similarly and life can go on as it has always done before.
There are plenty of people who ‘kept their powder dry’ and have been waiting for some kind of financial catastrophe to allow them to buy on a dip. I doubt many foresaw this scenario as the catalyst and we are far from having a grip on what the final outcomes will be other than we’re in for a bumpy ride. Mr. Toad’s wild ride comes to mind for those of you who have been to Disneyland in LA. If you’ve been watching the real estate market and are interested in talking out your particular scenario with a seasoned vet I’m here: watching, listening, collecting data from my peers and ultimately helping clients make their own decisions for what is best for each of them. Feel free to reach out to pick my brain.
I’ll leave you with this chart one of my favorite stock market watchers – who’s been through a stock market crash (or five to be exact) – sent to me last week. It helped me look towards the future and gave me a guide as to what may happen on the other side. I hope this post does the same for you.