The shelter-in-place order issued by Santa Clara County on March 17 led to weeks of confusion about how the real estate industry was to comply.
We had people in the middle of transactions left in limbo. Would the seller really move out? Are banks still willing to loan? How would inspections occur and title companies sign off? How could you purchase a home without being able to do a walkthrough? The county Clerk-Recorder’s office was even closed for a while.
Fortunately, clarification came rather quickly from the county. Real estate was deemed an essential service and home sales once again began to occur. While many steps in the home-buying process became virtual, there was still nothing that could replace a buyer’s desire to visit a home in person before making an offer. Luckily, private showings have been allowed to continue.
To be certain, showing a house during this pandemic is no picnic. Real estate agents are required to conform to both state and local showing guidelines. In Santa Clara County only two buyers from the same buying party can view the house at a time, by appointment only.
Rules of entry get posted on each property outlining the requirement for everyone to wear a mask, wash hands or use hand sanitizer before entering, avoid touching anything inside the property and maintain social distance.
Prior to entering the property, visitors must sign a Coronavirus Property Entry Advisory and Declaration understanding the risks of exposure to COVID-19, representing to the best of their knowledge they currently are not afflicted with COVID-19 or within the last 14 days, been in contact with someone afflicted with COVID-19 and are not experiencing any COVID-19 symptoms. These showing appointments are staggered to allow time to clean and disinfect the property between showings. Open houses are still not permitted.
These restrictions do make it more challenging to buy and sell your home. With the added uncertainty of the virus and rising unemployment numbers, you would think the housing market would be down. To many people’s surprise, it’s been just the opposite.
I recently spoke with Doug Goss, broker associate at Keller Williams Bay Area Estates, about his take on the market. He said that it has been a very strong summer for home sales.
“The real estate market has been red hot. Last month was our second highest July sales month ever,” he said. “We are seeing multiple offers on a lot of properties. The secondary home market is especially robust.”
The secondary home market growth seems to be tied to the ability to work remotely. The further you get away from Silicon Valley the more affordable your housing options become. While not all workers can thrive working remotely, we expect this trend to continue. Some of these destination purchases might actually end up becoming the primary residents for people who can continue their remote work indefinitely.
Goss added that we are, however, seeing some signs of cooling in the condo and townhome market.
“With the increase in the number of condos and townhomes available on the market, combined with the incredibly low interest rates, this is a great opportunity for first-time homebuyers to purchase a home in the area and start building wealth through home ownership,” he said.
So why is our housing market still so strong? First off, we live in the tech capital of the world. Many tech workers here have not been negatively affected by the stay-at-home orders.
Another factor is the inventory of available homes for sale is historically low. According to MLSListings Inc, there are only 984 single-family homes and 675 condos/townhouses available for sale in Santa Clara County. For years, housing production has lagged woefully behind demand in Silicon Valley.
Lastly, record-low interest rates are giving consumers that extra purchasing power to enter this hot market.
The continued housing demand during this pandemic has made it clear: Real estate will always be one of the safest places to invest. COVID has definitely made it more challenging to buy and sell a home but the extra precautions put in place by the real estate industry have created a safe and efficient environment for transactions.
I anticipate some of the changes in showing practices will extend well beyond this pandemic. Limiting the amount of physical traffic in your house while still fully exposing the property in a virtual way will continue to be popular.
I also expect the convenience of meeting with your real estate agent through video conference will be a lasting trend as well. Real estate agents seem to be just as creative and resilient as the housing market itself.
San José Spotlight columnist Neil Collins is the CEO at Santa Clara County Association of REALTORS, a trade association representing more than 6,000 real estate professionals in Santa Clara County and surrounding areas. His column appears every fourth Thursday of the month. Contact Neil at [email protected] or follow @neilvcollins on Twitter.