March, April and May are typically the high season for California real estate.
During these months, sellers scramble to get their homes on the market and buyers snatch them up as quickly as they appear – or faster – so that there is seldom enough inventory to keep up with demand.
Between the first 12 days of March and the first 12 days of April, however, there has been a 7.8 percent increase in the number of homes listed for sale on the Multiple Listing Service, but a more than 50 percent drop in sales, according to Trendgraphix, a leading provider of real estate data.
In addition, 21 properties have been withdrawn from the market. That’s more than November and December 2019, when sellers often choose to suspend sales efforts until after the holidays.
Some of these homes may have been withdrawn because the owners believe it will be difficult to sell them given the restrictions currently in place.
Others may be unsure how their job prospects and retirement funds may change over the next few months, and want to pause and reassess.
It’s likely many of these homes will return to market in the next few months, but no one knows for sure.
Plus, the major players in the I-Buyer industry – Open Door, Zillow Offers, Redfin and OfferPad – have suspended their programs.
I-Buying is a relatively new business model in which sellers agree to quick offers from investors, usually at a discount, who then resell them at a profit.
Halting these programs reduces the number of possible buyers for properties, and means property owners who have to sell in a hurry will have to seek other avenues.
Fortunately, many Realtors have established contacts with individual investors, who may be willing to offer comparable terms.
Foreign investments were already down, dropping from 8 percent of California’s market share in 2014 to 3.9 percent last year, according to the National Association of Realtors. Those decreases may continue to accelerate.
Prospective buyers, too, are facing new realities. Some have lost their jobs or seen hours cut.
Even those with stable jobs may be encountering a loss of down payment due to fluctuations in the stock market and stricter requirements from lenders.
Others may have been depending on open houses to look at properties they have seen online and to meet agents, and are unsure how to proceed without them.
On the face of it, it may appear the real estate market, at least in Livermore, has skidded to a halt. But here’s what those statistics don’t tell you:
• Real estate has been designated an “essential business” by the federal, state and county governments, meaning brokerages are still in business during the quarantine. Offices are closed, but most Realtors are working from home to help you buy and sell real estate.
• There are 86 Livermore homes available to purchase that are listed on the MLS as of the beginning of this week – 14 of them brand new to the market. In addition, there are 53 Dublin homes and 42 Pleasanton homes offered for sale on the MLS.
• Open houses are not being held, but vacant homes can still be shown in person, as long as health and safety measures are taken. These include limiting the number of visitors at one time; wearing masks, gloves and shoe coverings; using hand sanitizer and practicing social distancing; and sellers wiping down surfaces after viewings. In addition, all parties must sign COVID-19 advisories and assert they are healthy.
• Most occupied homes can be viewed virtually, including via scheduled LiveStream virtual tours. Photographers and agents are ramping up their skills to make these experiences as true-to-life as possible.
• In the past month, 68 Livermore homes have gone under contract, despite the changes in how properties may be shown. In Dublin the number is 53. In Pleasanton it’s 48. Homes are selling.
• Interest rates remain very low, meaning some buyers will qualify for higher cost homes. The average 30-year fixed-rate mortgage decreased to 3.33% from 3.50% last week, and remains three-quarters of a percent lower than the average of 4.08% a year ago.
• Mortgage applications increased 15.3% from last week and remains 168% higher than a year ago, indicating many buyers are still interested in purchasing homes.
• Two statistics that haven’t changed very much are selling price vs. listing price and days on market. Homes are still selling quickly – the average time on market is 23 days – at or slightly above asking price.
• Buyers and sellers may both benefit from less competition. Fewer looky loos. Fewer sellers who are just “testing the market.” That means most buyers and sellers today are committed to making the transaction work for all concerned.
If you are thinking about buying or selling property, contact your local Realtor today.
Cher Wollard is a Realtor with Berkshire Hathaway HomeServices Drysdale Properties in Livermore.