With so many things changing because of the COVID-19 situation, I wanted to check in with you and share what I can.
Real Estate Market
The real estate market is going to be affected by this and so, First time home buyer must pay heed. Demand has dropped because buyers are staying at home, if supply remains the same, there will be a downward pressure on prices (basic economics). I don’t know what will happen with inventory levels, some sellers (particularly ones living in their homes) are pausing their listings right now. Depending on how buyers react after the dust settles, we will see how much demand is affected.
The Fed’s rate to banks right now is 0%, so we will hopefully see interest rates come down soon. At the moment there is a bump up in rates, because so many people are refinancing.
Mortgage buyer Freddie Mac reported Thursday that the average rate on the benchmark 30-year loan jumped to 3.65% this week from 3.36% last week.
Freddie Mac said the short-term rise was due to mortgage lenders increasing prices to deal with booming demand for refinancing into loans at historically low rates.
The average rate on the 15-year fixed-rate mortgage rose to 3.06% from 2.77%.
It’s possible that we may see the same recommendations in the coming weeks that are in place in CA and NY. If that happens, it’s unknown whether home inspectors, appraisers, and surveyors will be able to visit a property to do their inspections.
You need to consider the possibility of that when entering into a contract now. If you are unable to complete a closing, will you still want to be in a contract? How long will you want to be on Pause? Let’s talk about it.
We will stay updated on how closures affect our customers. The local county offices in all of the areas we serve are all still operating, although mostly the offices are still operating (if only online).
Government Closings Affect Real Estate Closings
What may affect real estate transactions are coronavirus-triggered closings of local government offices. Currently, many county courthouses, district clerks, recording offices, registrars, and other depositories of public records are implementing temporary closures of an undetermined period. How ‘closed’ they are varies between cities and counties.
There are varying degrees of office closures. Some closures are basically “We’ve gone home and no one is here until we decide to come back.” For others, it’s business as usual, but only people who work there will be allowed in the building.
The title business relies on government offices to obtain and record vital legal documents. We record deeds and search ownership documents, liens, judgments, etc. through government offices. Fortunately, many county recording offices accept and process electronic recording of documents from title companies. Since that doesn’t involve face-to-face contact, hopefully the process won’t slow much.
Business Continuity is Critical
Government office closures are not the only concern. Private office closings may affect our ability to get mortgage payoffs, HOA documents, lien releases, and other information necessary for normal transactions. Hopefully, those companies want to keep working as much as the rest of us.
Like other businesses, the buzzwords I’m hearing in the title world are ‘evolving’, ‘flexible’, ‘patience’ and ‘monitoring the situation.’ Regardless of the current situation, the people who want to buy or sell a home are still able to do it.
If you really need to move right now we can still help you. We’ve had years of experience working in a paperless, virtual office and all of those tools are so important right now.
Virtual tours – We are offering live video walk-throughs and video tours for our customers. Stay home and we will show you the property. We will either do a live video call with you or record a video walk-through and upload it for you. Once you narrow down your search you can visit the property in person. We’ve always offered this to out of town customers, so we have the skills to make this as smooth as possible for you now.
From an initial offer through to contract and addenda, everything you need to sign will be done electronically.
Closings – we are researching which banks and title companies are capable of doing online notarization. If the list is low you can still choose remote closings where a closer can come to you rather than you enter the title office.
For Home Owners
Keep an eye on interest rates and refinance if you are in a position to. Run the numbers to make sure the closing costs are worth the new rate – it will depend on the rate difference and the length of time you plan to stay in your home.
If you need to move/sell your home, we are including video tours in our standard listing package as well as video walk-throughs for buyer’s first look at the property. We want to make sure the only people entering your homes are qualified buyers who are serious about your property.
Helping Others – What Can You Do?
None of us have lived through anything like this before, and we are all reacting differently. No matter what your beliefs, I challenge you to bring your best self to your days.
Please think about ways you can support your communities. Each of us can have an enormous affect right now, from following the guidelines, to reaching out and connecting with others (not literally), to sharing our expertise.
For Example: Our elderly population is both the most at risk for Covid-19 and for loneliness, and by being physically isolated they more disconnected. I challenge you to have a video chat with someone in the over 65 age group today. Help them learn how if they don’t already know.
If you need assistance, just ask. If it’s in my power I will do it, if it’s not I will help you find resources and solutions.
(Thanks to Brent Barris for providing some of this information in his newsletter)
Seide Realty, Broker / Realtor®