Hope everyone is safe at home and doing well. The good news is that, despite the logistical challenges of Coronavirus, we are able to get business done. We’ve had 3 closings in the last week and everyone is pulling together to get to the finish line- attorneys, inspectors, lenders, title company and, of course, our team and our clients.
Unfortunately, the bad news is pretty abysmal. Showingtime, a technology that we use to schedule track showings, is indicating a whopping 75% reduction in buyer activity (actual showings) here in NJ. We have seen this on the ground with many buyers out of town or sheltering in place or concerned about job stability. Here is a link to the showing activity data for the whole country:
Jeff Otteau, an NJ real estate market analyst who we follow closely, gave a webinar today with a sobering forecast for the next few months. I expect to see many fewer transactions happening until late summer or fall. Already “under contracts” are down by 25%. Unemployment filings in the state were 7x what they were at the height of the great recession. Otteau predicts prices to drop anywhere between 5-12%.
I’ve seen some fellow real estate agents putting out the message that all is well in the market. That’s not accurate! People hire us for our candid advice and we as an industry need to deliver that.
If you need to buy or sell, and people will continue to need to transact, we can absolutely get that done using technology and market expertise. If you are a seller it might be preferable for you to use this time to prep your home so that you are ready for the expected bounce back in Q3 and Q4 of 2020. If you are a buyer low interest rates and zero competition from other buyers may present some great opportunities for you. If you are planning on staying in a house for a few years you will be fine.
Putting this in perspective we were on an 11 year upswing which is about twice as long as the usual appreciating market. Coronavirus precipitated a correction that we were long overdue for and historically speaking the market will recover, probably fully by 2022, and real estate will continue to be a great investment.