As life takes many turns, sometimes a saying that you are proud to share backfires. As a realtor, I always encouraged my clients to embrace the concept that “Your Home is Your Castle.” This has now come back to haunt me. During these harrowing days of isolation in the shelter of our homes, our houses have gone beyond castle status to the brink of becoming, I dare say, our prisons. Yes, our homes provide the protection we need, and we are fortunate to have that shelter, yet it has also become the very place of our confined isolation during the global COVID-19 pandemic.
We have weathered the storms, tsunamis and hurricanes, and now we are faced with the invisible enemy. The problem is the unpredictability as to when the contagious spread will dissipate and how long it will take to get back to where we are all safe to mesh back into the families, friends and communities we so dearly love. It is truly proven that our homes are our ultimate protection and haven for all levels of comfort and discomfort. Since we are left no choice during this global pandemic, we are grateful for the shelter we have even though we are encapsulated within the confines of its walls.
But you’ve already heard all this and are sick of hearing it in the media, news and podcasts. So, please allow me to focus on the effects of the virus on the real estate market.
It is ironic to share with you that I am still getting calls of interest. To be honest, it is interesting to observe the effects of a panic-driven society due to uncertainty on many levels. Some calls I have received have a common thread—they will be sitting tight right now waiting for the pandemic to pass—while other calls are to put offers in for homes they have already seen online or in person.
The Greater Bergen Board of Realtors has strongly recommended compliance with Governor Murphy’s Executive Order 107 mandating people to remain home or at their place of residence for a list of reasons. Since buyers leaving their homes to view properties they might want to purchase is not included on the Governor’s list, further clarification is still warranted.
It is recommended by the Greater Bergen Board of Realtors that open houses be done by virtual tour to maintain safe social distancing. Many open houses have resorted to Zoom open tours. Can you buy a house without visiting the interior? It used to be the exception. Ironically, my buyer was just out-bid by another buyer who put in an offer purely from a virtual video of a home, so it is happening. Buyers are accepting the video modalities as a viable option. Is this the wave of the future?
If you have already committed to purchasing a home, it is understandable that you are worried about the housing market since the coronavirus is making life and markets unpredictable. Studies have been done on housing values during pandemics and concluded that while home sales dropped dramatically during an outbreak, home prices stayed about the same or suffered a slight decrease over time. To summarize, previous disaster conditions have simply put the housing market on pause before it rebounds.
Incentives are being formulated to help with housing demands. Important steps have been taken: federal government implementation of a moratorium on foreclosures and directed mortgage services to offer reduced payment on any mortgage backed by Freddie Mac, Fannie Mae or the Federal Housing Authority.
The overriding attraction at this tumultuous time is the low interest rates, which greatly increases your buying power and possible ability to afford a more expensive home for less. The Federal Reserve implemented two emergency interest rate cuts since the outbreak of COVID-19.
When everything settles, if the supply is low and demand is high, home prices will maintain their value since bidding will be highly competitive, driving prices to escalate. However, if the market is flooded with sellers who want to change their lifestyle due to an impending scare, then the reverse will occur, creating a buyers market with houses for sale saturating the market.
Historically, low unemployment, solid wage growth and low mortgage rates are all healthy indicators signaling high demand. However, the wave of the pandemic, skyrocketing unemployment, pay cuts and the drop in the stock market could contribute to a decrease in home values.
Keep in mind, however, as opposed to the swings in the stock market, people are not buying homes purely as an investment. Housing is a basic need, and the decision to buy is prompted by entering a new or different stage of life and many other personal variables. More now than ever, many buyers are motivated by low interest rates and the incentive that they are part of a smaller pool of people that can purchase a home at this time.
Stay tuned for further market updates that will reflect the pandemic tsunami we are all trying to endure the best we can.
So, as I said, “Your Home Is [Still] Your Castle”….in all conditions. Enjoy and recognize the blessings you have.
Stay healthy and safe and Chag Kosher V’Samayich to all!
Ruby Kaplan is a realtor licensed in both New Jersey and New York. Visit www.rubybobbyhomes.com for more information. The Ruby and Bobby Kaplan team/United RE/ will promote your home with the best of social media and create alerts for your criteria of housing needs. Your Housing Needs Are Our Priority! Ruby can be reached at (201) 314-4152, on her cell at (917) 576-4177 or at [email protected].
