Real Estate Round-Up: And now for some good news
Last updated 5/21/2020 at 4:07am
Things have changed considerably in California since March 19. We’ve all learned the term “social distancing,” and we’ve gotten used to wearing a mask at the same time as we wear our glasses. We’ve learned to walk to the other side of the grocery aisle and to stand back 6 feet while we’re waiting to pay for our purchases. We’ve learned that “takeout” can still be delicious and that “date night” means finding a fun way to do something with your partner that doesn’t involve leaving your home.
But, despite the light I am making of the often uncomfortable and impersonal new guidelines we are all living with, there is a darker side to the story, and it concerns how rough these changes have been to the California economy.
This week when Gov. Gavin Newsom announced that his revised budget included cutbacks for state employees, a broader net of people became impacted. Up till now large corporations and independent business owners had been singled out as “essential” or “nonessential.” Adding state employees to the people affected truly raised the bar of awareness and consequence.
The proposals circulating about the opening, delayed opening or modification of virtual and in person teaching in elementary and secondary education will bring another financial cost to our already strained fiscal shortfall.
So how about some good news? If you are one of the 81 million American homeowners, even though retirement funds and the stock market have taken a hit, home values are holding steady.
In March, the median existing-home price for all types of housing was up 8% from March 2019 across every region in the U.S. as reported by the National Association of Realtors. Yes, the pandemic has slowed sales down, with some slight pressure on prices, currently, but with the right policies and proper recovery, I believe there is a great chance that home values will fully recover even as home sales temporarily fall.
The demand for housing has outpaced the availability of housing for over a decade. The demand has not diminished and in fact has increased now that people have been forced to stay home. Suddenly people realized that their home was too small for all their family members or too large to take care of or that working from home may become more permanent than they thought, so having a home office is a necessity or having a yard with a view and/or a pool are not a luxury but an enhancement to the vacation that may or may not be available.
Renters and city dwellers are looking for room to roam, even if it simply means a few more rooms or a plot of land you can call your own.
New home purchase transactions support the fact that demand is still high. Buyers are prepared to purchase despite the hurdles that exist to get into property. NAR said that one quarter of all Realtors had at least one client go into escrow during the second week of April without physically seeing the property.
Transactions are proceeding with the growing use of new technology like 3D walkthroughs, virtual open houses and electronic signatures. As I speak with Realtors across the region and the state, they all report that the current “on hold” attitude by some buyers or sellers will immediately cease once the stay at home order is lifted.
I watch the Murphy & Murphy algorithms daily, and the number of potential buyers looking online at homes is much higher than it was pre-March 19. Buyers may not be able to physically look at homes, but they are looking online in far greater numbers than before March 19.
It’s not surprising that buyers and sellers are still motivated to engage in real estate transactions when you consider that the median family net worth for all homeowners in the U.S. has increased by nearly 15% since 2008.
Sustainable and affordable homeownership remains the best opportunity for most households to increase their long-term net worth and financial security. Property ownership is the bedrock of financial security for many Americans, which is why Congress has actively participated in protecting that asset.
Did you know that the real estate industry makes up nearly one-fifth of the U.S. economy? This is because purchasing a home is only the first part of the stimulus to the overall economy. New owners of homes hire contractors to make improvements, purchase furniture and accessories to spruce up their new home and invest their personal financial resources into their new community’s schools, stores, churches and restaurants. Every time a home is sold, multiple jobs are created when the new owner invests in their new property.
Knowing all the good that one single real estate transaction has on the total economy of a region, begs the question, why are so many sellers sitting on the sidelines?
On May 15, the California Association of Realtors created a recommended flyer to be posted at every listing that provides buyers with the required guidelines that must be adhered to before viewing a property. In April, CAR created four new forms to be used when showing property, listing property or purchasing property.
The number of COVID-19 cases continues to decline as a percent of people tested. Fallbrook and Bonsall have some of the fewest cases reported in all of San Diego County, so why wait?
Homes in Fallbrook provide much of what people want right now, which is some elbow room for the new lifestyles residents are now living within their jobs, families and relaxation. Buyers are looking for what Fallbrook has. Now is the time to get ahead of the curve and preempt the flood of homes that will come on the market once the stay at home mandate is lifted. We’re here to help you navigate the process, safely and securely.
Kim Murphy can be reached at [email protected] or (760) 415-9292 or at 130 N. Main Ave. in Fallbrook. Her broker license is #01229921, and she is on the board of directors for the California Association of Realtors.