It’s still far too early to tell what impact the coronavirus pandemic will have on the housing market.
If the crisis is over quickly, if the nation is successful at “flattening the curve” and life gets back to normal, the market should pick up where it left off.
But if efforts to slow the spread of the virus are unsuccessful and the governor or local entities are forced to keep people in their homes for many more months to stop more people from getting sick and even dying, that could be a different story.
For now, local Realtors and real estate experts seem cautiously optimistic about the future.
Right now, it appears that home sales that were already in progress before the full brunt of the pandemic-related shutdowns and stay-at-home orders were felt in mid-to-late March.
“My indication from talking to different agents around is that we continue to close escrows,” Gene Wunderlich, government affairs director for the Southwest Riverside County Association of Realtors, said. “Moving forward, it’s gonna be difficult.”
Wunderlich – who also happens to be the mayor of Murrieta – said he was on a call recently that included the National Association of Realtors’ chief economist, who Wunderlich said was forecasting a steep downward spike in home purchases over the next 30-60 days, but then was “moderately optimistic” about an upward spike after that.
“You know, there is still pent-up demand out there, there are first-time homebuyers that want to buy homes,” Wunderlich said. “He’s anticipating that the demand will return fairly soon once this is behind us. Now, obviously, how long this continues will have some impact on this.”
Kim Murphy, a Fallbrook Realtor who writes a column that runs weekly in Village News, also said she feels there is demand that will drive home sales upward again if the pandemic crisis ends soon, but not necessarily if it goes on.
“If I was evaluating it based on the conversations I’m having right now and the pent-up interest from sellers and buyers, as long as we’re released from this stay-home mandate sooner rather than later, I think we’re gonna have a phenomenal June, July, August,” Murphy said. “But if they keep us locked down through the month of May, I have no idea how much of an impact it will have.”
Murphy said inventory in Fallbrook is already much lower than it was when the market was doing well before the pandemic took hold.
“If you look at just the general listing inventory of detached homes, we’re right around 150 units, which is one-third of what our market was when we were in a really good market,” Murphy said. “Our normal is 400 to 450, and we have about 155 homes (right now).”
Roy Moosa, who is also a Fallbrook Realtor among the several other hats he wears in town, said the market was doing well until mid-March.
“It was right about the 15th, about the middle of March when this thing got to the point where everything got shut down,” Moosa said. “Those people that had things on the market either withdrew them or left them there.”
That’s exactly how Wunderlich described the March real estate market as well.
“We continued to have fairly strong buyer activity the first couple of weeks until everything melted down – the first half of March was pretty good, the second half of March was quite a bit weaker,” Wunderlich said. “It should have been a real good month but then there were cancellations as people lost their jobs and bailed out of escrow.”
Real estate agents can continue to operate despite the statewide stay-at-home order, having been deemed essential. And they’re taking extra precautions while doing so. Murphy said her agency, Murphy & Murphy, provides boots and gloves to any prospective buyers and sprays down interior surfaces with disinfectant both before and any showings they are still doing. She’s also having clients sign releases in which they acknowledge the risk of contracting coronavirus.
Moosa said sales have basically stopped for him.
“Nobody is looking for property; nobody is selling property,” he said.
Moosa’s agency, Sun Realty, also handles property management though, so he said he’s encouraging anyone delivering rent checks to utilize a drop box and is trying to maintain as much social distance as possible with those who need to enter his office.
He said that the housing rental market didn’t seem to have taken too much of a hit.
“There are two houses that we just rented out,” Moosa said. “People are still looking for homes to rent.”
And he said he hasn’t seen an especially large number of renters unable to pay their month’s rent, though he said he’s working with those who do have problems. Commercial renters, though, do seem to be struggling already, he said – a potential cause for concern.
“On the commercial market, it seems to have hit the commercial market harder than the residential,” Moosa said. He estimated maybe 80% of the commercial renters he works with were already unable to pay rent this month.
“For Fallbrook, it’s really tough because a lot of the businesses in Fallbrook were close to the edge to begin with,” he said. “For some of them, this is gonna push them over.”
For now, though, it remains unclear what direction the housing market, the commercial real estate market and every other section of the economy will ultimately be headed in once the pandemic is over. Only time will tell.
Will Fritz can be reached by email at firstname.lastname@example.org.