This regularly-scheduled sponsored Q&A column is written by Val Sotillo, Northern Virginia-based Realtor and Falls Church resident. Please submit your questions to her via email for response in future columns. Enjoy!
Question: What has been the impact of the coronavirus on the real estate market in the past weeks?
Answer: First of all, I hope you and your families are healthy and safe. I want to give a special thank you to all the frontline coronavirus workers; from nurses, doctors, hospital personnel, law enforcement, grocery store and pharmacy workers, cleaners, US postal service, to all of those who produce and deliver food, goods and services necessary for our healthy existence!
I’ve seen lots of carryout and delivery activity at local restaurants, and I hope we can keep our favorite establishments in business. Here’s an awesome interactive map that the DMV Foodie Crew put together for restaurants offering delivery and carry-out in Northern Virginia during the Temporary Stay at Home Order.
Okay. Now back to real estate!
What the Stay At Home Order — Executive Order 55 Means for Real Estate Practices
The Northern Virginia Association of Realtors (NVAR) and the Virginia Association of Realtors (VAR) announced that Realtors may continue to operate real estate businesses, but must do so in accordance with Executive Order 55 released on March 30.
This means that real estate operations such as showings, inspections, appraisals, lending, closings and any activities crucial to a real estate transaction are allowed in Northern Virginia.
Due to social distancing, Open Houses have the potential to violate the 10-person guideline and could pose an unnecessary risk to the public. Therefore virtual Open Houses and virtual showings are highly encouraged.
Personally, most buyers I’ve been working with are happy to virtually tour properties while in the safety of their homes. Other buyers who need to find a home immediately and need to see the property in person before making an offer, can still see the properties while taking safe social distancing measures. I always have extra masks, gloves, disinfecting wipes and shoe covers for my clients. As much as I understand a buyer’s need to see a property in person before making an offer, I’m advising clients who are not purchasing for another few months to stay home.
Tysons Market Update
It seems that most of the Virginia market in general has softened in the past weeks. In the graphic below you can see the significant drop in property showings. However, the showings that are taking place tend to be to ready-buyers so it should take fewer showings than it used to for the right buyer to surface.
New inventory has continued to flow into the market, but it is down from the previous weeks. Within 5 miles from Tysons, 102 properties were listed since March 30; you can see all active listings here.
In the past week, 32 homes went under contract, showing that there are still buyers out there and they’re are likely securing better terms than they would have a month ago, and facing less competition.
Properties that were placed under contract during the COVID-19 lockdown period haven’t closed yet and I’ll share more information once they do.
The Difference Between 2008 and Now
The Great Recession was a result of financial imbalances, starting primarily in the housing sector. This one is from a totally external factor, the coronavirus disease.
In 2008, prices were up despite high supply because demand was artificially high due to irresponsible lending practices that allowed people to buy much more than they could afford. Mortgages over the last decade are much more conservative than the mortgages that led to the Great Recession. There are strict debt-to-income and credit limits, and predatory products are all but eliminated from the market.
According to CNBC, the housing and mortgage markets are much healthier now than they were then. Homeowners have a record amount of equity, compared with the subprime crisis when home values plummeted and millions of borrowers were underwater on their mortgages, owing more than their homes were worth.
The optimistic scenario is that unlike in the Great Recession, once the virus is contained and immunity starts to take hold in the area, even though supply chains will take some time to get back to normal business, it may not feel like the cold start that followed the housing and mortgage crash.
This spring selling season doesn’t reflect the vitality it has in previous years. It’s too early to tell you how/if the market will bounce back in the next 3-6 months. The effects of COVID-19 in the economy change often and I am not sure how long it will take to go back to normal. I can tell you as a realtor that there’s always someone who needs to sell, and someone who needs to buy. We all need a roof over our heads.
We’re all in this together, and we need to follow the social distancing rules in order to get through this. For now the main goal as a community is to stay safe and informed. Stay tuned, stay healthy, stay home, and stay kind.
If you’d like more information, or would like a question answered in my column, please reach out to [email protected]. I hope to hear from you soon.
Val Sotillo is a licensed Realtor in Virginia, Washington D.C., and Maryland with Real Living At Home, 4040 N. Fairfax Drive, Suite #10C Arlington, VA 22203, 703-390-9460.
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