- Friday morning, March 20. There are 470 open houses listed for this weekend.
- Friday afternoon. Several mayors issue statements and business guidelines intended to limit non-family interactions. This included limiting open house activity. Greater Boston Association of Realtors® adopted these guidelines.
- Saturday morning. There are 444 open houses listed as of 10:30.
- Monday morning. Real estate agents are not on the list of essential services. Non-essential workers are advised to stay home.
In a rapidly changing environment like this, it’s no wonder if you’re unsure how to act in the real estate market. Here is my advice.
First time homebuyers, what should you do?
There are wildcards with this situation, the biggest one being how deep a recession we will fall into now. So much of your decision-making will depend on how long this downturn lasts. Also, what government assistance is given and how well that supports workers, as well as businesses.
- Interest rates are likely to remain low, since that is a tool for economic stimulus.
- Demand for purchasing housing is likely to drop. Some of the buyer pool are people who have been unemployed and can no longer qualify for a mortgage.
- Supply of houses is likely to increase. Sales will include properties not sold in the normally busy spring market, as well as people who now choose to sell, for fear of recession making it harder to sell.
If three factors are in your favor, you should plan on purchasing after the restrictions are lifted.
- Your personal employment situation is stable.
- The business you work for is stable.
- Your lease ends more than two months after the public health restrictions are lifted, or you are a tenant at will.
What is likely to happen when everyone is no longer restricted?
I remember what happened after 9/11. September is normally the busiest time for offers in the fall market. The two weekends after the attacks, real estate was suddenly slow. Not many open houses. Not many sales. My clients didn’t have the heart to look for a house. Some spent time with family.
However, on the third weekend, on a Sunday, the US invaded Afghanistan. That weekend, open houses were better attended. For the rest of the fall, the housing market went back to where it likely would have been in the middle of September. By the end of the quarter, there was no significant change in real estate sales numbers.
The same thing is likely to happen now; however, the slow period is of undetermined length, so the recovery time is, too.
A similar multi-week slowdown happens around Presidential elections and other major national events. So, this is a reliable pattern. People need to live somewhere. The real estate market continues.
Now is a good time for planning.
Real estate showings will trickle down to nothing, given the current public health restrictions. So, seeing property is not an easy or safe option at this time. You will not be able to get a home inspection, if you find a property. It will be difficult to hire house movers while the essential services list remains as it is. This condition may last two weeks, but it is likely to be longer.
Real estate lenders, agents, and attorneys are still answering calls and emails to help you get ready.
Lending: You can apply for a mortgage pre-approval now. They last for months and can be updated.
Choosing an agent and making a plan: It is a good time to look at sold and for sale properties online. An agent will help focus this search.
Virtual location shopping: You should network with people who live in towns you are considering living in. There have been huge disparities in how each town is responding to this public health crisis, and what support they are giving parents with school children at home. You will want to know before you start looking for a home there.
More changes ahead
The public health regulations are changing rapidly. Their effect on the economy is uncertain. Effective Tuesday March 24, many people will be out of work. Some have work now, but may lose their jobs and businesses in the aftermath of this epidemic.
At the same time, some people are being paid and not working at all, some are getting paid and working at home, and some are still going out to work as usual. Some will be on unemployment. Parents are home with children, and some of them have to work. . I addressed the disparity on my personal blog on March 23.
There is no way to predict how long or how devastating this will be to the economy as a whole, to real estate markets, or to anyone’s personal financial well-being. A good agent can help you make contingency plans.