Jim Valentine: COVID – Business as unusual
Northern Nevada real estate was brisk with values increasing when the COVID-19 pandemic suddenly appeared. We’ve written extensively in this space about the adjustments to the real estate as things developed and we adapted our business practices. In the intervening months we’ve seen the market explode from out of state buyers looking to escape the leadership practices of the town, county and state in which they resided.
With the normal volume of current residents looking to move up and/or down to update their real estate assets to match their current wants/needs, the market is really bumping. It is interesting to have the combined high volume of sales with all of us wandering around with our masks on practicing social distancing with anti-bacterial juice at the ready. It isn’t just agents and buyers honoring such safety practices, but the loan officers, escrow officers, inspectors and everybody else mixing it up with the public in our industry as well.
Despite the pandemic changes, sales volume is way up and prices are rising. Many people are also refinancing their homes which, combined with the high sales and new loan volume is creating a crunch on the lenders and those servicing them, i.e. — appraisers. The result is that appraisals are taking 4-5 weeks to get done instead of 10-15 days. That is rocking the timing of the escrows delaying closings by a couple of weeks or more. This gets particularly dicey when you have sales relying on other sales and, sometimes, those sales relying on another sale. The ole game of Home Contingency Dominoes. It is yet another mental adjustment that buyers and sellers and agents must make to keep their sanity and achieve their objectives.
The new normal for investment real estate is to drive by and see the outside. If the property is occupied by tenants, agents can’t go in and buyers and inspectors can only go in after the offer has been accepted and with the approval of the tenant, which isn’t always forthcoming. Then there is the necessary leap of faith that the tenant will continue to pay their rent when they know that they can’t be evicted at this time.
If they are finally evicted and the owner takes them to court to get what is owned to them he may have a judgment that isn’t worth the paper its written on due to the “blood from a turnip” theory. Still, investment properties that are priced even close to market are selling quickly and often for than what would have been conventionally paid.
Essential business is a term we’ve learned to pay attention to. Real Estate sales people are essential, as long as we maintain our safety practices. Title and escrow are also essential as are lenders, appraisers, and inspectors. Fortunately, contractors and their employees are also essential so building can continue. The folks putting in the improvements for new subdivisions are essential allowing for the continued efforts to catch up after the long lack of building and lot creation that we experienced during the recession.
An interesting unexpected outcome of the COVID work at home, or stay at home, lifestyle is that buyers and sellers have a lot more time to do research about selling or buying. They are all over the internet getting information on homes, the real estate process, trends, potential impacts on the economy of their community, etc. They are getting to be very smart, as are their counterparts. The result is a brisk market full of people that have a pretty good idea of what they are doing. The resulting dynamics make it fun for the active agent that is able to keep up with the market and help his customers compete successfully. Real Estate sales have become a team effort between agents and buyers/sellers more so than ever.
While the Real Estate industry and the public have learned to adapt to these unusual times, it will be interesting as virus-related things clean up to see what parts of the current adjusted practices will continue to be utilized. It won’t be the first time in history that the unusual becomes the usual, but it is interesting that it occurred so fast, quickly became wide spread, was readily embraced by so many people and dramatically changed our industry.
When it comes to choosing professionals to assist you with your Real Estate needs… Experience is Priceless! Jim Valentine, RE/MAX Realty Affiliates, 775-781-3704. firstname.lastname@example.org