Prior to the spread of Coronavirus, the NJ real estate market was still in good shape. But let’s be real, things have changed. The good news is that agents/brokers, attorneys and lenders are still making sure their current transactions get to the closing table. However, the bad news is that the number of buyers and sellers interested in jumping in now has fallen off very significantly.So now what? It mostly depends on how quickly those who lost their jobs and income because of the pandemic can recover.
OVER SIX MILLION Americans filed for unemployment last week, an insanely large number that is only going to grow. According to Lawrence Yun, chief economist for the National Association of Realtors, “Housing, like most other industries, suffered from the coronavirus crisis, but once this predicament is behind us and the habit of social distancing is respected, I’m encouraged there will be continued home transactions, with more virtual tours, electronic signatures, and external home appraisals. Many of the home sales likely to be missed during the first part of 2020 may be pushed into late summer and autumn parts of the year.”
Gov. Murphy is calling Real Estate an essential business and is now allowing the basic unit of real estate, ‘in person appointments’, or one single showing of a home link to Murphy executive order. Open houses are still currently off the table. Murphy worked with more than 40 financial institutions, including Citi & Chase to NOT initiate foreclosure or eviction proceedings for at least 60 days. HUD announced this month that the FHA has been authorized to implement an immediate foreclosure and eviction moratorium for single-family homeowners with FHA-insured mortgages for the next 60 days.
I have several buyers and sellers who would understandably rather wait, and despite a significant number of people deciding to ‘hold off’, there are still people needing to buy or sell, but they’re nervous. So is everyone else involved in real estate transactions. So as mentioned above, agents, attorneys, lenders and title companies are all working hard to get the closings/settlements that were already underway completed (including yours truly in the pic above doing just that).
Technology steps into the breach. Expect more virtual showings, videos, and zoom chats to replace or precede anything previously conducted in-person. Expect digital documents to eliminate even more paper and signature pens. Expect attorneys to limit the number of people at the closing table to comply with new federal and the World Health Organization guidelines.
Sellers – Agents are, for now taking less listings, and are trying to reassure sellers that they will only bring through qualified buyers, instructing them not to touch anything, escorting them the entire time they are in the home and then disinfecting door handles. Check your home value here. Buyers – Those that left assets in a bear market, may wind up with less cash for down payments. Interest rates are now at rock-bottom lows, but that won’t prevent sales from slowing and prices from coming down, as the economy flips from a strong seller’s market to a buyer’s market.
As interest rates fall, the demand for refinancing seems to be skyrocketing, but is volatile. In March, 30-year fixed-rate mortgages were hovering around 3.25 percent to 3.5 percent. Then, they were at 4 percent, as investors flocked to 10-year Treasuries, and the Fed announced it would buy mortgage-backed securities. Demand for bonds won’t help mortgage interest rates or housing affordability. If you’re looking to REFI, I have contact info for excellent area lenders, so reach out.
An expanding demand is city dwellers looking to flock to the suburbs to rent for more space and an easier time social distancing as Covid spikes and urban crowding becomes too difficult for many to handle.
Stay safe and help flatten the curve.