Coronavirus & San Diego Real Estate

As we all know, these are strange and trying times for everyone in the country. Originally, in California, Realtors weren’t considered an essential service. I understand that the California Association of Realtors was trying to get that changed and although it wasn’t changed yet in California, the Trump administration did declare that Realtors are essential.

As far as residential real estate sales go, the figures are not yet in for March. The February figures that did come in last week, show that the market was still strong. But, as we all know, now this pandemic has had a drastic effect on almost every type of business including real estate throughout the country.

Coronavirus & San Diego Real Estate

The California Association of Realtors did come out in March with an addendum to the standard residential contract used to purchase properties in California. This addendum basically allows any buyer to receive their full deposit back should they be affected by the virus.

Now, it seems that a lot of sales that were showing as pending last month are showing up as back on the market now. Imagine if someone was in escrow to purchase a property last month and they were two weeks away from closing when the State issued their order to remain in in place. Not many buyers would want to proceed with the closing not knowing if they would have a job or any source of steady income once this was all over.

Also mortgage lenders who had mortgage money approved for closing last month and were unable to fund the loans, have now a situation where they are limited in the amount of new loans they can issue until the pending loans clear out.

Now, as we move into April we’ve all heard of the many layoff notices issued by major corporations as well as a number of local restaurant chains and service industries. People who are affected by these unanticipated events are certainly not going to be looking to make one of the largest investments in their lifetime anytime soon.

So, even with interest rates and mortgage rates extremely low right now, these are more than offset in financial and economic upheaval created by locking down the US economy.

I’d like to say that I was pleasantly surprised when talking with some fellow San Diego real estate brokers to find out that there is still quite a bit of interest in the San Diego residential real estate market. Whether this interest is being generated by retirees, essential workers or move-up buyers it’s too soon you to analyze.

Perhaps, a saving grace for the Southern California real estate market and the San Diego real estate market in particular, is the fact that before the impact of the virus, we had a shortage of well priced residential real estate. So, even though the economic stress were going through right now, will definitely decrease the demand for homes in Southern California, the sales of homes here may still remain on even keel and just become more aligned with the demand.

Naturally, all of this depends on how long the economy remains a knockdown.

Stay safe!

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Coronavirus & San Diego Real Estate