For the past couple of weeks, I have received multiple questions from folks in regard to the Coronavirus and the effect it will have on the Real Estate market. I am not a scientist nor do I pretend to be one, so I will leave the medical part up to the experts.
However, I am a Real Estate Professional with extensive experience in the Southern California Real Estate market representing buyers/sellers and buying and selling my own properties. Thus, below are my summarized Observations:
Observation 1: The crystal ball and speculation are fun, but to coin a phrase from my old Econ Professor at the University of Redlands some thirty years ago, “show me the data.” Hence, lets look at what the numbers say over the last week from 3 April 2020 to 10 April 2020 in the Ventura County MLS for all of Ventura County:
A. New Active Listings = 137
B. Active Under Contracts = 137
C. Pending = 119
D. Closed = 135
Analysis 1: Obviously there are still buyers and sellers of Real Estate based on the numbers but not to the extent of a normal spring which would typically have numbers two or three times the above amount. Also, about 70 percent of the pendings over the last week were contracts taken in early March.
Observation 2: The under $700,000 real estate market and other unique properties have been fairly active with multiple offers on some properties.
Analysis 2: There is a limited supply of active listings in some property categories as numerous sellers have postponed their listings but there are still active buyers of Real Estate. Thus, with fewer listings, buyers are competing for properties. Hence, inventory is limited.
Thus, the Question what happens after the virus as it relates to Real Estate:
Again, I will avoid the crystal ball and unwarranted speculation and focus on past data from previous recessions (Economist predict a recession of some sort from the virus) and the effects it had on the Real Estate Market , below are National Averages from Corelogic the biggest data collection company for Real Estate Prices:
1980: 6.1 % Increase
1981: 3.5 % Increase
1991: 1.9% Decrease
2001: 6.6% Increase
2008: 19.7 % Decrease
Thus, in three out of five recessions, prices of Real Estate increased. Of course, we don’t know what happens after this predicted recession, we can only use data to help us make informed decisions. We also know that in Southern California the above numbers can be skewed as our increases and decreases are typically greater than the national averages.
Therefore, it boils down to what a buyer’s or seller’s timeline for a purchase or sale is. Market timing is a futile experience and nearly impossible to predict. If a buyer plans on living in a home for 10 to 20 years, whether they buy now or after the virus plays itself out is probably not as relevant as many speculate. If a buyer finds a property they like, then buy it. If a seller needs to sale, one advantage to putting the house on the market at this time, is they will have less competition from other sellers. In summary, use data, your personal financial situation, and your own timeline to make your Real Estate decisions.
About Dave Crowell, Dave Crowell is the Broker/Owner of American Dream Realty in Camarillo Ca and a top producing Camarillo Real Estate Agent, DRE 01845970. For more information feel free to contact Dave at 805-300-3345 or visit my website at www.mycamarilloproperties.
Dave Crowell
Broker/Realtor
American Dream Realty
Direct Line: 805-300-3345
email: crowelldg@gmail.com
www.davecrowellrealtor.com
