San Diego real estate & Coronavirus

This is just my interpretation, and I could be wrong so one should again do their own investigation and talk with your own legal and financial professionals.

It has certainly been a challenging last couple of weeks for all of in the San Diego real estate market. Yes, things are totally different as we navigate these uncharted waters with concerns for our health, our families, our financial well being and the general best interests of our society.

Real estate & Coronavirus – I’m seeing in the lending environment is a big disconnect between Federal Reserves actions and home mortgage rates. Mortgage rates dipped and probably hit “bottom” during the March 4-6 time frame. Rates went up a good bit last week and have stabilized some this week. Here are a couple of articles that explain the moves:

Real Estate & Coronavirus

Also, other things are impacting us as well. Biggest changes are in the possibility of delayed appraisals, what happens if a county recorders office is closed, what about employees who are furloughed during the processing of their loan file, and notaries being able to meet with buyers/borrowers to sign documents.

Also, I hear that some agents are reporting sellers that don’t want their houses held open right now (don’t want strangers or potentially sick people in their homes (especially older sellers) and buyers are now more reluctant to go spend the day driving around looking at homes.

• Many appraisers are declining orders, and many borrowers and home sellers are not allowing appraisers into their homes.
•  If you have a transaction in a county closed to in-person and e-recordings, you can proceed with closing if the title company will issue an endorsement insuring the lender for the period of time between closing and recording.
• Many are asking about Remote On-line Notary (or RON) services: RON is not yet allowed in all states/counties, nor is it allowed by most loan programs. The Mortgage Banker’s lobby is working on emergency federal legislation pushed through, to be introduced sometime in March.
• Many cities/counties/states are ordering bars and restaurants closed: Unfortunately, loans for those owners and employees, affected by these measures, cannot be closed currently. Those loans will be suspended.
• FHA has not yet issued any guidance at this time on any of these topics.

One estimate from Capital Economics is that real estate sales could drop 35% annually. 

Realtors are reporting a decline in buyer traffic as well as sellers de-listing their properties because they are either concerned about people in their homes or worried that they will be selling into a down market. Agents are now pushing virtual open houses. “Data in coming months won’t be pretty and the nice run-up in sales we’ve been enjoying over the past year has been indefinitely paused until this crisis ends,” said Matthew Speakman, an economist with Zillow.

There is also concern among real estate agents about appraisals and closings which are usually done in person. Title companies are reporting that they are trying to do closings online, but some states do not allow electronic notarization.

“The Fed and the government are moving quickly to address the expected economic disruption with fiscal and monetary stimulus,” said Danielle Hale, chief economist at realtor.com. “In two weeks March housing inventory data may be the first glimpse into whether these measures are boosting confidence enough for sellers to still put their homes up for sale as they traditionally do in spring.” Still, unpredictability is the only certainty for now.

Lawrence Yun, chief economist for the NAR said: “These figures show that housing was on a positive trajectory, but the coronavirus has undoubtedly slowed buyer traffic and it is difficult to predict what short-term effects the pandemic will have on future sales.”

This is just my interpretation, and I could be wrong so one should again do their own investigation and talk with your own legal and financial professionals.

Be safe.

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