Sunday, April 12, 2020
What's With The Housing Market?
I look over emails every day with a dozen or more sellers dropping the price of their property. This is a response to the temporary situation along with a need or perceived need to sell their house quickly. It may also come from agents who need to sell something to keep the paychecks flowing.
It seems that everything is working against the sellers these days. And it's not too great for the buyers either. I've seen reports that in some areas realtors cannot have lockboxes – not even on vacant properties. I'm not sure what that is about other than the need to exercise some of the newfound power by some members of the ruling class.
It may be a back door attempt to stifle the showing of properties which is already hindered by the hesitancy of sellers to allow strangers into their homes and the difficulty of presenting properties while maintaining “social distancing” standards. It may be that the powers that be should just be honest and ban the showing of real estate if they are that concerned.
They can ban this all they want, but that doesn't help the realtor trying to help his or her clients – any more than much of the whole shutdown helps anyone whose income has evaporated. It also doesn't help the family who needs to sell their home as quickly as possible.
As I mentioned earlier about the drop in real estate prices, it's not necessarily a reduction in value but an increase in the need to sell. But lowering the price of a piece of real estate does absolutely no good if no buyers are coming around to see the place.
As I look through Craigslist ads, about all I see in the Tampa Bay area are mobile or manufactured homes. The owners looking to sell the houses seem to have disappeared. I don't know if they have just put their plans on hold or if they have given up then listed their property with a realtor. Whether they have done that or not, their house or condo is still competing with many others for a smaller pool of buyers.
Video tours have helped fill the gap up to a point. However, before I agree to buy a property, I want to see it, especially if it is one I will live in. The videographers are doing a very good job of showing properties. They were most helpful in creating a piece for a property I recently sold. I am told that you can't put lipstick on a pig and make it something else, but as an old photographer I can tell you that I can take a questionable house and make it look like a nice place to live. I am not unique in this. Anyone good with the camera can do the same thing – and they do. Many times I thought I was going to see a nice looking house and it just didn't turn out so well. The pictures were right, but there was a lot you couldn't see.
Perhaps if one really has to sell, it would be time to go with one of the hedge fund corporate buyers or local investors. These people are not foolish, they know the market is not the same as it was months ago, and really, it is most likely not the same as it will be several months down the road when America is open for business again.
Two things can be learned by looking at today's market. First is that unless some disaster really strikes or the naysayers keep us shut down indefinitely, the low prices may not hold for long. For the buyer this is an opportunity as we are in a buyers market for those who are anxious to sell. On the other hand, unless one really needs to unload a property quickly, holding on a few more months could be quite beneficial. When things open up, the pent up demand from those who have not been greatly damaged by the shutdown could well push the prices up again. It's not time to panic and dump the place cheap unless you really, really need to sell.
However long we are stuck in this holding pattern, there is definitely one more lesson that is to be learned or reinforced if it has not already been learned. That is, for all the benefits of owning real estate – the income and capital appreciation along with the tax treatment, it is not a liquid investment. Whether it is your home or rental property or vacant land you can't just go to your online broker and sell when the urge strikes you. It is market-driven and the value of a property is not necessarily what the Zestimate says or what the appraiser says. The value of a property is just what someone is willing to pay for it.