The New Rules of Real Estate in the Time of Quarantine

Real Estate Survival Guide with Terry Story

4/15/20

During this week’s Real Estate Roundup, Steve spoke with Terry Story, a 31-year veteran at Keller Williams, about the state of the real estate industry and how agents are being affected during a time when most states are under mandatory quarantine.

The Rules Have Changed

With the majority of the country in quarantine, the rules have changed for the real estate industry. Though agents are considered essential workers, they have to follow different guidelines when helping clients find a home. “We’re not allowed to be in the house with a client when showing it,” Terry said. “The seller can’t be in there either. We’re allowed to show up and let the client in. Only the buyer can be in the home.”

But the majority of agents are taking even further precautions to help prevent potential spreading of the novel coronavirus and maintaining social distancing. “Most agents have created walking tours of homes ahead of time to offer clients. It’s only once they’ve expressed serious interest about the home that we invite them to tour in person. We also have sanitizer, gloves, booties, and other protective elements to help do our part to stop the coronavirus pandemic,” Terry said.

The video walking tours are popular online features anyway. They let agents show potential buyers a home room-by-room without the agent or buyer having to be in a location at a specific time. These virtual tours are especially helpful now and can be made more personal for specific clients. Terry added, “Despite everything that’s going on, homes are still being looked at, bought, and sold. We just have to adapt and keep everyone as safe as possible.”

Prices And Inventory

As can probably be expected, prices and housing inventory are being affected by the coronavirus pandemic as well. Terry said, “Prices are coming down. But as I’ve said before, you tend to get more and more quality offers when you lower the price of a home. However, I have seen some lowball offers. I have a property on the market for $740,000 and there was a $350,000 offer. We know times are hard, however, this is a precedent that we’re not going to set.” “And no one’s at that level of desperation just yet,” Steve added.

But there are a lot of questions. How long will the recession last? How long will people be out of work? What will the economy look like in a few months? Prices could continue to take some hits and inventory is affected also. Terry said, “Right now, we’ve been in a buyer’s market. We’re down to like three months of inventory, which is extremely low. A balanced healthy market is at six months.” Steve pointed out the additional fact that people who are quarantined in their homes aren’t going to be able to sell.

It’s Terry’s hope, however, that potential sellers will take advantage of the opportunity available to them. “With inventory down, now is a great time to sell. There are more people competing for fewer houses, which means more offers. If more sellers think like this, we’ll be able to boost inventory levels.”

Mortgages

Despite what’s happening in the world, it’s still relatively easy to get a mortgage if you’re buying a home, provided you qualify. The only situation where this isn’t quite as true is with jumbo mortgages. “Jumbo mortgages, at least in my market, are mortgages over $510,000. Lenders end up putting deals together and then selling them on the secondary market,” Terry said.

Steve offered some additional info on jumbo mortgages: “A mortgage broker told me that banks, hedge funds, and even some private investors typically buy these mortgages. But many don’t want to get stuck with such long-term mortgages at the low -interest rates being offered with so much uncertainty.”

All of this means that you really need to consider what type of home you want and need and whether you can afford the home without a jumbo loan. If you’re going to need significant financing, it might be better to wait.

If you’d like to learn more about buying or selling a home, check out Keller Williams!