A hot topic around the virtual water cooler of late is how the shelter-in-place directive has affected the real estate market.
Following are anwers to some frequently asked questions – and opinions are across the board.
Q: Are houses still being sold?
A: Yes. Any property in contract before the shelter-in-place order has been able to progress through the lending, appraisal, title company and recording process without too much delay.
Q: Are buyers in contract worried about completing their purchase?
A: Some are worried and some have canceled – or are trying to – their contracts. Other buyers actually view this as an opportunity and are moving to close the deal.
If you are in contract to buy a house and are considering canceling, be sure to talk it over with your agent and seek advice from a qualified California real estate attorney. Most believe that the shelter-in-place order is not grounds to cancel a contract. There may be other options as well.
Q: What do sellers think about the situation?
A: With people sheltering in place, all open houses and client showings have stopped completely, so the market is essentially on hold until the order is lifted.
The local Multiple Listing Service (mlslistings.com) has discontinued its “Days on Market” counters so that houses don’t appear as if they are on the market for longer.
Some sellers are just waiting, and others are canceling or withdrawing their listings until the order to shelter in place is lifted.
Q: After the shelter-in-place order is lifted, would that be a good time to sell?
A: This is where my crystal ball gets a bit cloudy, but my answer this week is: probably yes. Here’s why: Many sellers have decided to remove their houses from the market, which further reduces an already low inventory. Then add to that the fact that buyer demand does not appear to have fallen off by much. So when the shelter-in-place directive is lifted, we may see a resumption of strong buyer demand and very few houses on the market to buy, which could lead to price increases. The big question is: Where will buyer demand be? My sense is that it will start off with a bit of trepidation and then come roaring back.
Q: What about an economic slowdown?
A: This is a real possibility, and we just won’t know until it’s in our rearview mirror. A lot depends on how long it lasts and what stimuli the government enacts. If there is a slowdown, that could reduce buyer demand, thus reducing the upward pressure on prices.
Q: Do I still need to pay my property taxes and mortgage?
A: As of this writing, property taxes are still due Friday, and most banks have not done much about mortgage interest relief. Either or both of these may change as we navigate the crisis.