Picking up on the market conversation and likely scenarios that we will see in the real estate market once the economy opens up…
I do not think that we will see the same thing in the same respect
as we saw during the financial crisis. Right now, I am seeing people that are
contacting me, investors who are contacting me, and asking about property that’s for sale. There are buyers who have purchased already from me and they are looking for property for friends. We are able to go out there and some of these people are out there actually already looking at property in the sense of virtually, so to speak.As a matter of fact, the other day, we even had an offer on a property.
Closings for properties that were already in the pipeline from before the pandemic are continuing. We have virtual closings. I had a property that we were in contract or setting up the closing. The attorney mailed the documents to the seller. He sat in his car, in the driveway of the seller’s house, and waited for them to sign it. Then retrieved it from the mailbox probably with gloves and mask and everything. Then they got those documents brought over to the buyer’s attorney. The buyer’s attorney or their assistant met in a separate room with the buyer. That’s how (one of the ways) the closings are happening these days.
What can we see or what can we reasonably expect going forward in the real estate market, as the economy starts to re-open in different phases? I think that just like everyone else, its going slowly start to happen that the market starts to open. Real estate is phase 2 of the re-opening of the economy. I think that over the next few months or year, the only people really that are gonna be selling property are people that really, really want to sell. I think that a lot of people will just decide to wait it out and not sell because the property values will be going down at least some percentage over the next few weeks, the next year or so. I can definitely see a buyer’s market assuming no second wave of the pandemic. Assuming the stock market doesn’t crash and break though thresholds the buyer market might be limited in duration to 12-24 months.
Definitely, opportunities will be there for people that have been sitting on the sidelines waiting with cash. I don’t think it’s going to be the same type of situation that we were dealing with at the time of the financial crisis. I think that we’ll see buyers be able to take advantage of some depreciation.
However, the X factor that could really fuel depreciation is fear and a destructive 2nd wave. If sellers flee the city, liquidating their properties because of the lack of restaurants, and fear of getting sick, this can hit harder than the financial crisis. Working against this force is very low interest rates and condos can be rented out so do not have to be sold. Co-ops normally choose people that are even more financially secure and these parties may be insulated more to an economic downturn.