As the community grapples with the impacts of the coronavirus, new residential real estate listings dropped 30 percent, pending sales are down by about 65 percent, and loans for the jumbo market — loans over $625,000 — have chilled.
“We are seeing buyers and sellers who have lost their income putting homebuying on hold,” said Staci Caplan, president of the Santa Barbara Association of Realtors.
Caplan told Noozhawk that the first two weeks of April have not changed as dramatically as the real estate community thought, amid the COVID-19 pandemic scare that has rattled the world. Still, real estate has been impacted “much like all other industries.”
According to MLS, there were 142 closings and 209 sales pending between March 15, 2019 and April 15, 2019. For the same period in 2020, there were 95 closings and 87 sales pending.
Real estate is regarded as an essential service by the government so agents and brokers have been working to help buyers and sellers even through the shelter-in-place order.
Real estate professionals have pivoted to new ways of showing homes. The Sunday Open House is on hiatus and replaced by virtual open houses, photos, digital signing and phone calls.
“Realtors are doing our part to stop the spread of this virus by following strict guidelines set forth by the California Association of Realtors and we are limiting contact with the public and our clients,” Caplan said.
Caplan said property management is also in a tough spot right now. Each jurisdiction has a different set of rules and regulations regarding evictions.
In Santa Barbara, tenants who do not pay rent in April and May cannot be evicted. Tenants do not have their rent waived by the government; they just have to work out a plan with the property owner to pay the late rents.
“There is the quandary of if the tenant doesn’t pay rent, then how does the property owner pay their mortgage, especially since the rollout of the unemployment programs and Small Business Administration loans are not being fully implemented yet,” Caplan said. “It tough for everyone in the rental market right now.”
Renee Grubb, owner of Village Properties, said many of her client have either withdrawn their properties from the market or buyers are not interested in looking at the moment. She said sales are off by about 50 percent.
She noted that the situation has made it very hard for newer agents since open houses are a good source of gaining new business
Village Properties has four coronavirus forms that must be signed before the company can show a property or take listings, and properties can only be showed one on one.
Grubb said the market has cooled after March was strong.
“April is definitely off substantially, but again we are listing far less,” Grubb said. “The number of withdrawals is declining as time goes on. We are not seeing substantial declines in prices.”
Overall, she said, the company is holding up well
“We have older agents who are concerned about their health and are staying put,” she said. “We are reaching out to our clients with real concerns for their well being and are honoring their feelings about this pandemic.
“We are there to help those buyers and sellers who need to buy and sell. We are taking this time to keep ourselves educated, and are looking forward to a good end of year and great 2021.
Gay Milligan, a broker for Keller & Williams, said sale prices of homes probably won’t be as affected as most people think because the inventory is so scarce.
She said no more than two people can be inside a home for an open house, so the Realtor usually waits outside. The people viewing the home are asked not to touch anything and to do as much research about the home and the neighborhood individually.
Some sellers are waiting to sell, she said, thinking the market will go up later, while others are selling now out of concern that impacts of the coronavirus will last much longer.
Shea Hutchinson, president of the Santa Maria Association of Realtors, said the biggest impact facing the market right now is the restrictions and guidelines to show homes, including wearing masks, gloves and shoe covers, as well as sanitizing before of after showings of property.
“These restrictions have obviously affected business with many occupied homes not taking showings at all,” Hutchinson said. “Active inventory has actually increased slightly in the last month however number of sales have been reduced.”
He said nearly all agents have gone virtual to show homes.
“Nearly all paperwork on a daily basis, whether it be contracts or general paperwork, is being done digitally,” Hutchinson said. “All meetings including MLS meetings and training, is now done via video conference. I think it will a few more weeks before we know the complete effect, as most real estate transaction closings have originated about a month before closing.”
Developer and property manager Ed St. George said rental-property owners also have been hit hard by the pandemic.
He suggested several ways to help tenants during the COVID-19 crisis and allow property managers to keep their residents.
“Property owners, too, are concerned, as the need to cover mortgage, tax, utility, and maintenance costs persists regardless of tenants’ circumstances,” St. George said. “Meeting these obligations is essential to the long-term viability of our housing supply.”
He has offered a $100 DoorDash coupon to his tenants if they pay the rent on time.
Property managers must communicate proactively with tenants and consider rent deferral plans where necessary, he said.
“You can help tenants facing hardship by offering to defer a portion of their rent for the next couple of months, which they can then repay over a set period of time, such as six months, and waiving late-payment and sublease fees.”
St. George said it important to show tenants compassion.
“Many renters are going through an incredibly stressful time right now,” he said. “Some have lost jobs, others may be dealing with family members who are sick. Students are facing the possibility of failing a semester or not being able to graduate on time.
“Take time to check on your tenants’ emotional wellbeing. COVID-19 will not be around forever, but how our community responds during this temporary time of crisis – particularly when it comes to keeping people housed and maintaining our housing supply — could have repercussions long into the future.”