It’s late March, usually a time of great rejoicing in the world of real estate as long-dormant buyers, sellers and agents reawaken at the prospect of a busy spring. The season usually lasts into the languid days of summer, at which time all parties return to hibernation (in theory) until fall.
This year, though, everything is different.
It’s different in a way that seems to change hourly, which is why this is about the 10th draft — all wildly different — of this column.
What was “real” last week (San Francisco new listings down 20% as of March 18) has been amended so many times (San Francisco new listings down 40% as of March 23) that to offer you a definitive prediction as to the impact of COVID-19 — the coronavirus — on local real estate, which was my original goal, now seems naive at best and the deluded ramblings of a self-deluded fool at worst. So I will tell you what I know … so far.
Last week, the word was that business was mostly acting as usual. A few agents I spoke with remarked that open houses were still busy (as of March 14) and that new listings, while slowing, were still at least happening. The general feeling among those in the biz, if not cheery, was at least on the “let’s roll up our sleeves and get through this” spectrum of business optimism.
One week later, of course, so much has changed, or if not changed than gained speed. Last Tuesday the San Francisco Association of Realtors (SFAR) banned open houses and broker open houses for three weeks, promising to “revisit” the ban after that period.
I’m guessing it’ll be extended, because anyone holding an open house three weeks from now will be violating the state’s shelter-in-place order, which doesn’t have a definite end date but could likely extend out “eight weeks,” according to Gov. Gavin Newsom. The association also banned individual property showings, which at that point surprised no one but was necessary because, as one agent told me, “some agents and their sellers (were not) following the rules.”
“Things are definitely an adventure right now,” he said.
But honestly, even if the SFAR and the governor hadn’t cracked down, who’s going to go to an open house during a pandemic anyway? Omega Man?
As of last week, another agent said, some listings were still garnering multiple offers. “I had one that got eight offers,” he said, adding dryly that four were “solid” and four were “doomsday offers.”
As of last week, 74 percent of agents polled by the CAR (California Association of Realtors) thought the pandemic would have a negative effect on the market. Of course, the week before that the same poll showed 51 percent thinking it would have a negative impact. Who knows what that percentage will be this week?
Last week, 75 percent of agents polled said they weren’t doing more virtual tours. This week, virtual tours are going to save the real estate industry. Go to Zillow, you’ll see; the virtual tour option is featured prominently on every listing.
It’s way too early to predict how this is going to play out, though I think we can all agree that there will be a major disruption. Buyers and sellers are already withdrawing from deals; listings are dropping precipitously. People are bunkered. The market is going completely cold, something that never happens, not even during the tumbleweed-blowing-across-the-road days of the 2008 recession.
If there is a silver lining, or at least a note of positivity through all of this, however, it’s that you can always count on the ingenuity of the real estate industry. Agents and brokers will do their best to keep things going. Virtual tours, virtual signings, agents visiting properties alone and FaceTiming clients… these will become the norm and then will have lasting impact even after (if?) The world returns from the brink.
One agent told me late last week that this is an excellent time to “get caught up on technology and work on organic relationships with clients.”
“When the market picks back up,” she cautioned, “It’s going to be fast and furious.”
And of course, for the particularly shrewd there will be opportunity. If, as some predict, housing loses a significant chunk of its value across the board over the next few months, you can bet that those who’ve been ready to buy all along but have been sitting and waiting for the engine to roar back to life will pounce, snapping up properties they couldn’t have afforded six months ago.
Hopefully things will seem clearer in the coming weeks (days? hours?). As for now, though, all we can predict is that the road ahead will be full of twists and turns.
The Market Musings real estate column appears every other week. Larry Rosen is a San Francisco-based writer, editor, podcaster and recovering former Realtor. He is a guest columnist and his viewpoint is not necessarily that of the Examiner.