April 2020 Market Update
/Wow! We are in some scary times right now. I hope each and everyone of you reading this month’s market update is staying home safe and sheltering in place with their loved ones.
Before I get into the real estate market, I would like to first take a moment to thank our front liners - our doctors and nurses, caregivers, first responders and everyone taking care of our sick and the elderly. Thank you for your dedication to keeping each other safe. Three of our agents, Tess Padron, Kim Bautista and Shay Amid are registered nurses at Stanford, Kaiser and UCSF respectively, and much of our client base at Hatch Realty Group is in the medical field as well. As I check in with them and many of our friends and clients in the medical field, there doesn’t seem to be a consensus on how serious this pandemic really is and how long it will last. Some have told me how scared and anxious they are of being in the hospital each day and how low they are of PPE supplies. They say that this pandemic has made them realize that our health system is broken and they are in disbelief how unprepared the hospitals are for COVID-19. Others, on the other hand, say that there is no need to be afraid as long as you constantly wash your hands with soap and water, disinfect everything you touch and keep your distance. As death tolls are just starting to rise here in California, we need to brace ourselves for the next two weeks as the surge approaches. My hope is that the more pragmatic of the two responses I’ve gotten is actually what transpires, and we, as a community, are able to ease out of the danger zone quickly.
As of March 31st, the Shelter In Place ordinance was revised. “Essential Business” was redefined to include businesses relating to real estate transactions. That means, realtors, escrow officers, appraisers, notaries and title companies are now exempt from sheltering in place if they are working to help a client secure or sell real estate. It feels great to be needed, but with that comes a huge responsibility to stay safe and make sure we practice social distancing guidelines so we help flatten the curve. To sum up the rules regarding conducting real estate, virtual showings are preferred. No open houses, or broker tours are allowed. When virtual showings are not possible, CDC social distancing rules apply. For in-person showings, no more than 2 people (from the same household) and 1 agent can be in the house at the same time. Showings are prohibited for owner occupied properties.
I have clients desperately in need of housing. On Tuesday, when we were officially dubbed as as an essential business, I showed houses in the East Bay. My clients took turns going into the homes as one spouse waited in the car with the kids. You will not believe how many people were out looking at homes on a weekday and how many listings were new on the market. Almost every house we toured had other buyers and agents waiting to show. Everyone kept a distance, wore masks and in some cases, sanitizer and booties were provided at the entrance. Most of the homes we checked out were new to the market and had offers due this week. In speaking with the listing agents, showings were very busy despite COVID19, multiple offers were received and they were expecting to sell well above the asking price. With the current market situation and a looming recession I honestly cannot believe it!
As usual, homes priced well under $1M are still selling like hotcakes with multiple offers over the asking price. One example is a home in Orinda located on 8 Rose lane. That was a fixer upper listed for $965,000. In less than a week on the market, they received 7 offers and it will be closing in a week for $1,150,000. Another home in Union City, located at 3164 San Andreas was listed 4 days ago and accepted offers today. It is currently listed for $895,000 and the seller told me they will be in contract for around $950,000 tonight with 2 offers in hand.
When I look at the stock market each day and hear what all the “talking heads” have to say about the economy, I fear for the worst. The stock market is now 30% below its peak since February and extremely volatile. After the dust settles and people start going back to work, our nation will still need to rebuild, and it will take some time as we surpassed 6M unemployed with the numbers rising. Businesses of all sizes are taking a hit and many predict that bankruptcies will also be on the rise. However, when I’m out showing properties in the Bay Area, I see a different picture.
Generally speaking, in Peninsula and San Francisco markets, $1.8M and below seems to be the breaking point for the “HOT” homes. Once you go above $1.8M range in San Francisco and the Peninsula, sales tend to be a little slower. The shelter in place regulations were more strict in the beginning of the month, with Mayor Breed putting a complete ban on showings in SF, but still, of the 287 homes on the market in San francisco, half are pending and ready to close and the other half are new or in coming soon status. Average days on market is 36. In San Mateo County 592 homes are on the market and half are pending. Luxury homes above $6M are taking much longer to sell.
We are seeing huge losses in the stock market, but people still need a place to live. Anyone buying right now, is primarily looking for a place to live and the purchase is more of a long term investment. I included an article from realtor.com on what their prediction is on the market. I agree, vacation homes and investment properties will be the first to slump. If you have the extra cash, it might be a good time to buy one of those in a few months. Who knows what the economy will bring, but whatever it does, know we are here for you.
If you or anyone you know needs help in any way, please feel free to reach out on the link below. We at Hatch Realty Group will be happy to help with any needs. Safety is our first priority and want to make sure you all stay well.