Having lived and practiced real estate in San Francisco during the financial collapse in 2008, I can tell you that we do not have dire times ahead. As hard as this pandemic may become, it will fall well short of the economic challenges of a decade ago.
This event and its aftermath to our local economy will be short lived and the markets will regain their footing quickly. I’m predicting a “V” shaped recovery. Leading up to this event the US economy was the strongest in the world, with low unemployment, a thriving job market, attractive interest rates with the FED supporting this growth. We will come back strong because that is the will of the people.
In the month of March, the real estate marketplace has dramatically changed as San Francisco and the Greater Bay Area is under lockdown with Increasingly restrictive measures on people’s movement. Realtors have put a pause on all showings for the short term, even for premier clients. We all need to do our part and clearly real estate is an industry that interacts with the public, so we simply need to do our part and stay home.
Many agents have also placed a “hold” on their MLS listings, which basically removes the property from the market for a short duration. This translates to listings falling off real estate Web portals resulting in days on Market (DOM) not accruing during this time.
Inventory will be even tighter than before as property owners will want to adjust their timing to sell and be more patient. Some owners however will be more motivated to sell and will give concessions, bringing opportunities back to buyers.
Aggressive and motivated buyers can clearly score a good deal going forward. Those planning on getting a loan should note the escrow period may take longer as lenders and supporting services might be backed up. Cash is and will always be king in this environment.
Interest rates will continue to be very attractive by historic measures for some time to come. Once we get beyond the worst days, the recovery of the sick will bring about the economy getting back into gear.
Clearly we have lost our springtime real estate market but that’s not to say all is lost for the year. As we progress and get beyond the worst of this pandemic, we will all be ready to get back to normalcy. I think we just need some good news and the worm will turn. It might not be tomorrow and it may require a string of positive developments to take hold. In the meantime, stay positive, humble and thankful.