Coronavirus Impacts on Real Estate

By Michael Edlen | Special to the Palisadian-Post

As everyone knows, since March 19, all Californians have been under Stay at Home orders. Real estate practitioners have now been classified as essential service providers and permitted to conduct business outside their home, provided they maintain physical distancing and abide by the safety protocols specified.

I am often asked how we can be showing and trying to sell properties when they assume no one is buying at all at this time. The fact is that while there has understandably been a great slowdown in activity in most areas, people still want or need to either buy or sell at this time. I know of some listings that have received multiple offers as recently as April 3.

The California Association of Realtors has issued several pages of “Best Practices Guidelines” to cover advising sellers and prospective buyers regarding the recommended and required practices, pre-marketing and marketing activities, drafting and acceptance of purchase agreements, performing inspections, and other details to complete the transaction, etc. There are also guidelines for agent’s visual inspection disclosures and provisions to handle unexpected delays by either party as result of the current virus situation.

The question is how can we be showing and selling properties during this unprecedented situation and still abide by the required “social distancing” and other safety requirements. The solutions which have evolved over the last month include “virtual tours” of various sorts that are done online before a potential buyer decides if the home may be a property they would like to buy.

There are many certified property inspectors who are willing to inspect the home, provided that people follow common sense and safety procedures. Generally, they will stipulate that no one is to be in the home during their inspection. They generate a comprehensive report, augmented by many photos to illustrate the text, and then speak on the phone with interested parties.

There certainly is no question about the virus having an enormous impact on the field of residential real estate, including downward pressure on prices to some degree. The sales numbers for the Palisades this year had been surprisingly strong up to the middle of March.

However, there is no doubt that the second quarter numbers will be dismal. The third quarter will depend on how soon the virus is controlled, how deeply the economy is impacted by recessionary factors and how significant an impact the government’s fiscal stimulus package has over time.

There have been many ancillary effects from the virus that will continue to make substantial changes in residential real estate for many years to come. There will be a vast increase in permanent telecommuting, resulting in far fewer agents working out of regular offices.

Marketing will never be the same now that 3D technology and virtual tours have become commonplace. There may be far fewer agents in the business as consolidation and increasing service models continue to raise the bar and streamline the entire process of buying and selling homes.

The astonishing speed with which this COVID-19 virus pandemic and the related issues seemed to occur has served as a wake-up call for everyone. Clearly we have seen the need to be far better prepared, mindful of what basic values really matter, the importance of family and other relationships, respect for our environment, and so forth.

Did you ever hear of Zoom before this last month? Although most people know of communications via FaceTime, Skype or WhatsApp, Zoom has been used by an exponentially growing number of people in recent weeks because of its ease of use for small and large groups of people. Families and work groups alike have many platforms now to stay in visual as well as vocal touch.

Will the real estate industry get back to what was the normal? It will never go back.

Most of the changes we have been making are vastly more efficient, highly cost effective and rapidly appealing to nearly all generations. In addition, many people feel that nature finally forced a massive “re-set” of life on planet earth, and we can hope that many of the lessons learned will bring us all to a kinder, more appreciative and responsible place in the years to come.

Michael Edlen has been a local real estate consultant to thousands of people over 30 years. He can be reached for no-cost consultations at either 310-230-7373 or michael@edlenteam.com.