Throughout the nearly 20 years Nicholas French has worked as a Silicon Valley realtor, strangers inquiring about his profession have consistently proclaimed how fortunate he is to possess such a potentially lucrative one. That all changed during the Great Recession.
“The look on people’s faces was like I had leprosy,” said French, a broker associate with Sereno Group, recalling the 2008 crash. “Everybody was like, ‘How are you doing? Oh my God. Are you getting through this?’”
After more than a 10-year absence, those looks – and concerned phone calls from well-wishers – have returned with the coronavirus pandemic. Shelter-in-place orders have brought residential real estate transactions to a near standstill as social distancing protocols make hosting open houses impossible, and potential buyers are restricted from leaving their own homes anyway. Some deals are being renegotiated and others are falling through as nervous buyers back out.
Cindy Bogard-O’Gorman, a broker associate with Compass who specializes in Los Altos, Los Altos Hills and Mountain View residential properties, referred to the situation as “far, far, far from business as usual.” She said industry professionals have been advising against unnecessary work like home staging during the shelter-in-place orders. Since their implementation, for-sale signs remain erect even when properties exit the market because the companies that provide the signs have been unable to take them down.
“We’ve been in a state of flux about whether we can even show property,” she said.
Some respite to all the uncertainty arrived last week with clarifications to the March 17 order imposed by six Bay Area counties, including Santa Clara County, and the city of Berkeley. According to the new language, real estate agents are deemed essential workers, and when virtual home tours are not possible, it’s permissible for them to accompany up to two people who live together on home tours arranged by appointment. The homes must be unoccupied, however.
“That hurts the sellers a lot because they’re living in their houses, trying to get them sold,” Bogard-O’Gorman said.
Married Sunnyvale couple Brian Popper and Genie Moore were preapproved for a loan in early March, some of their belongings already placed in a storage pod in anticipation of an eventual move to the San Joaquin Valley. Their plan consisted of buying a home in Oakdale, moving and then placing their Sunnyvale house on the market. They managed to tour a handful of homes in person before the lockdown, but now they’re confined to flipping through online photo galleries. And the inventory is depleted anyway.
“We’d see more and more stuff was coming up, and then all of a sudden, it did noticeably drop off, and now the things that have been there and sitting on the market, a number of those are going ahead and they’re selling or they’re coming off,” said Popper, a district wildlife supervisor with the U.S. Department of Agriculture.
A Realtor.com report of housing data released Thursday revealed a 15.7% decrease in inventory nationwide in March compared to March 2019. The San Jose and San Francisco metro areas experienced 31.4% and 19% inventory decreases in March, year over year, respectively. Analysts from the website said the drops could be connected to concerns about the coronavirus, but some were quick to point out that the number of active listings had already started to decline in January and February.
January and February are typically a time of low inventory, French explained.
The lack of available homes has many buyers hitting pause, and reasonably so, French said. He estimates more than 80% of those he represents are waiting until the lockdown ends before making a move. It’s a strategy that could potentially play out well for them.
“I think this is going to be one of the best opportunities to be a buyer that we’ve seen in a decade – since the financial crash,” he said. “And you know why it’s going to be such a great time? Because of lack of competition.”
He advises would-be sellers to sit back and determine how motivated they are. Are they willing to bear what the market will offer at a time when multiple bids on properties are less common, or can they wait and take a gamble on what the market will look like three to four months from now? Perhaps more apartment and condominium dwellers, who may have been cooped up in close quarters for weeks, will be eager to invest in single-family homes with yards, French mused.
What Popper and Moore decide for themselves could be contingent on their loan preapproval; they’ll have to renew it once it expires in early June.
“We’re hoping that we will still qualify based on the way things are then,” Popper said. “But right now, we’re kind of just in a holding pattern.”