The coronavirus pandemic seems to be dumping a big bucket of water on the Bay Area’s once red-hot real estate market, putting the brakes on what was expected to be a booming April.
According to Zillow economist Jeff Tucker, home sales across the Bay Area are down about 35 percent from last year at this time, a precipitous slowdown that began around mid-March as stay-at-home orders took hold.
“Starting around March 16th,” Tucker said, “we saw traffic on Zillow listings, on our website and on our apps, plummeted 30 percent pretty much over night starting at that point.”
Despite the Feds lowering of interest rates aimed at propping up real estate markets, many buyers and sellers appear to be watching from the sidelines, afraid of what the future may hold for the economy.
“There’s so much to be uncertain about,” Tucker said. “There’s a question of what are interest rates going to do? What’s the stock market going to do?”
And Tucker said many buyers and sellers are waiting to see what home prices will do? Will they drop as banks like Wells Fargo cancel jumbo loans — a cornerstone of the Bay Area expensive home buying. It’s an uncertainty in uncertain times.
“A lot depends on how this home crisis plays out,” Tucker said.
The push for social distancing has created a challenge for real estate agents who just a month ago were seeing heavy foot traffic at open houses. Now agents are having to devise creative means to show homes as traditional open houses are off the table. Real estate agencies have banned agents from bringing visitors into occupied homes, though they are still able to bring people into vacant homes.
Instead, agents like Kymberly Simmons-Greene of Nova Real Estate are using things like 3-D and virtual home tours to show properties.
“Buyers and sellers are still interested,” Simmons-Greene said, “they’re just trying to figure out how they can go about connecting and dealing with the properties and the transactions.”
Agents are also worried banks will tighten up lending as they did during the 2008 Recession — making it more difficult for families to qualify for funding. Tucker said the Bay Area’s tech workers typically rely on stock sales to purchase homes - and with stocks taking a beating over the last month that could also impact sales.
Simmons-Greene said some of her clients have gotten cold feet in recent weeks.
“I have clients I’m working with now,” she said, “buyers and sellers that have literally told me we want to pause and wait.”
But Simmons-Greene said she hasn’t seen the grim numbers Tucker is citing. She said aside from difficulties showing homes, there is still an inventory of homes with people willing to buy and sell them.
“Honestly there’s more listings going on the market,” Simmons-Greene said, “almost as if it’s business as usual.”