Client message during the Coronavirus crisis
I hope all is well at your home.
While beginning to accept our new reality, I’m still grappling with the surreal experience.
Looking out of my home office window, it sure looks beautiful and safe out there. Like real-life Talking Heads songs.
No matter how we process this event individually, we all know we just want things to be normal again.
I’m surrounding myself with positivity, keeping the music on, making new connections through a flurry of online meetings, and just working through it. My heart still breaks for people and families having to cancel major life events, and those going through the many hardships this has brought on. Tough experiences truly make us stronger. Many of us have been here before.
As for my family, we’re making the most of staying home. Card and board games, making meals, online school (shout-out to SUSD!) and music lessons, cleaning out closets, getting outside for fresh air, laughing a lot, and of course, Netflix. Lots of Netflix.
I’m hopeful you’re enjoying your space and that good vibes surround your home.
By now, you may know a bit more about what is in the stimulus package, or CARES Act. A great resource for the CARES Act is found on The Tax Foundation’s website. Here are other important articles relating to rents, mortgages, and other financial help:
“Coronavirus: Resources for Property Owners” – National Association of Realtors
“Guide to coronavirus mortgage relief options” – CFPB
“The Small Business Owner’s Guide to the CARES Act” – US Senate Committee
“Here’s exactly what banks are offering to do to help Americans affected by coronavirus” – CNBC
“Arizona Executive Order – Postponement of Eviction Actions” – Office of the Governor
Much of what makes up the local fabric of our neighborhoods are the places we gather to eat or drink. The importance of supporting local cannot be understated. Wanting to dig deeper, I found a study conducted by Michigan State University about what “supporting local” really means:
- Locally-owned businesses create two out of every three new jobs.
- The community retains $73 for every $100 spent at a locally-owned business. Only $43 is retained otherwise.
- Locally-owned businesses have a vested interest in the community and are likely to make charitable contributions 400% higher than non-locally owned businesses. This out-spend on charity is not only significant, but it is also typically a local spend in support of schools and community groups, keeping additional funds in your community.
- Locals require less public infrastructure, saving tax dollars. Local businesses generate a net fiscal result of +$326 per 1,000 square feet. National businesses create a net fiscal deficit of -$426 per 1,000 square feet due to the dependency of vehicular traffic and long-distance supply chains. More local businesses mean more tax dollars deployed locally.
- Oh, and those little things like better customer service and contributing to your neighborhood’s unique culture.
Of all the “shifts” we are becoming aware of, continuing to shop local is everything. When public gatherings are permitted, we want our favorite places to be there for us, so we need to be there for them now. If you aren’t comfortable having someone prepare your food, consider purchasing a gift card to use at a later date. Links to some of our favorite local places are found here.
How COVID-19 has impacted local real estate
Despite the news, supply and demand fundamentals remain strong. Q1 was pointing to one of the strongest years yet. Still, the “have to” buyers and sellers are out there. Those who were just getting into the market or have a place to stay to wait it out are on the sidelines until this event shows clear direction. iBuyers (Offerpad, Opendoor, Zillow Offers, etc) have ceased purchases for the time being. I wouldn’t be surprised to see some consolidation in this space before it’s all sorted out. Their absence is great for buyers in the sub $400,000 market.
We still have an incredibly low inventory issue, which has gotten worse over the past few weeks with new listings either being delayed, taken temporarily off the market, or canceled altogether. In zip codes 85250, 85258, 85259, 77 homes were taken off the market in March. In terms of sales, during February (pre-Covid, anyone?) 157 homes went under contract in the same 3 zip codes. 141 homes went under contract in March. That’s a solid month no matter what. (8 homes under contract in the first 3 days of April.)
Showings have dropped off dramatically – down more than 50%. But, those in the market to buy are very motivated and serious buyers. The environment is similar to transactional motivation during the Holidays.
Jumbo loan lending is a mess. Need a jumbo loan? Ask your mortgage broker to find you a portfolio loan (when a bank loans their own money and is not dependent on the secondary market to find an investor). The secondary jumbo loan market is largely idle until there is a clear direction.
Agents are scrambling to find new ways to market property virtually – methods I’ve been using for years on every listing like 3D Matterport tours and architect-drawn floorplans. Only 3% of listing agents nationwide use tours, aerial photography, and floorplans. I cannot imagine my business (and your success) without them.
I’m currently refining a checklist to fully pre-qualify buyers, both from a financial and interest-level standpoint, before they ever step foot in a listing while we are ordered to stay home, and ensuring a limited-visit, paperless experience from start to finish.
I’ve been sitting in on a good deal of Zoom meetings and webinars conducted by local industry leaders. The biggest takeaway so far is that this is the only time in at least the last 6 downturns where the real estate sector goes in with significant shortages in both current resale inventory and shovel-ready lots, as well as historically low debt levels by landowners, developers, and homebuilders. Combine this with the number of people ready to move to Metro Phoenix when stay-at-home orders are lifted, the return to normal life could very well see real estate leading the charge.
Coming soon! $750,000
8556 E San Lorenzo Dr, Scottsdale
With extreme conditions, ideas are born that foster new systems, businesses, and methods. We’ll figure it out together. The coronavirus is already having a positive impact on the environment. People are showing more empathy with one another. Remote work and meetings are going to stick. Staying at home for the greater good is a forced re-wire of what’s important to us, and my hope is that society takes advantage of it.
My door (Zoom screen) is always open, whether it’s to be a resource or just someone to talk to.
If you want to know what this all means for your property or have market questions, ask me.
If you have an idea sparked from quarantine that you want to bounce off someone, let’s brainstorm.
If you’re scared or anxious and need someone to vent to, I’m here.
If you need to hide from your kids for a while, I got you.
Until then, enjoy your family, thank a front-line worker or teacher, and support your local restaurants and businesses. I appreciate you.