COVID-19 and Its Impact on the Real Estate Market

By BRIAR PECSOK | Special to the Palisadian-Post

With all of us stuck at home and a lot of free time on our hands, many seem to be filling their down time with connecting on social media. I’ve seen many comical posts about hitting the reset button on 2020, or fast-forwarding and completely erasing it.

While I think it is safe to say that this is not how we all anticipated 2020 shaping up, I remain positive that this is a momentary blip on the radar screen and we will come out on the other side, hopefully stronger.

Everyone’s industry has been impacted by COVID-19 and the real estate market is no exception. With Governor Gavin Newsom’s shelter-in-place orders, the real estate market has had to adapt and be creative on how to market and show homes.

The good news is that homes are still selling—albeit maybe a little more slowly and negotiations are a bit more challenging—but there are still buyers who want to buy and sellers who want to sell.

Prior to the ordinance being put in place, the Palisades real estate market was off to a strong start for 2020, and there was a lot of optimism that 2020 was going to be a busy year. While we’ve seen a drop in the number of escrows opened since the shelter-in-place order went into effect around mid-March, there are still deals to be made and sellers who want to sell.

With interest rates at all-time lows, money is cheap and there are confident buyers who are wanting to take advantage of this as well as the current uncertainty of the real estate market. They realize the market will again stabilize, and they want to purchase while the conditions favor them.

What’s interesting about the current real estate market is that the inventory level is extremely low. During the 2008 recession, the Palisades real estate market had approximately 200 homes on the market, while currently we have substantially less than that: just over 80 homes. 2008 obviously had a lot more inventory and it was definitely a buyer’s market.

Although the current inventory is low, which technically would be considered a seller’s market, the predominant feeling is that because of the economic conditions and health crisis, our market has shifted to more of a buyer’s market, at least temporarily, until the health crisis passes. We have seen a slight drop in the prices of homes, and there are some good buys out there for buyers.

If you are a seller, it is still a good time to consider putting your home on the market. It might be a little bit more challenging with the shelter-in-place ordinance, but as we’ve seen over the last couple of weeks, real estate professionals are always evolving and coming up with creative solutions.

Also, with the extra time on people’s hands, they are constantly accessing online real estate search engines and scouring the homes that are on the market. With inventory levels so low, it bodes well for homes that are on the market as they get more looks. In addition, the Multiple Listing Service has temporarily put a hold on the Days on Market count.

It is unlikely that this crisis will go on indefinitely. We are hopeful and optimistic that it will come to an end sooner rather than later, especially with how diligent and careful people have been.

If you are a buyer, interest rates are low and there are some great deals to be had. If you’re a seller, inventory levels are low and there are buyers out there who want and need to purchase.

Briar Pecsok is a member of The Marguleas Team of Amalfi Estates. Briar truly believes in giving back to her community and gives 10% of her commission from each sale among five charities: Make-a-Wish, SPCA-LA, American Cancer Society, PATH, which helps homelessness, and Homeboy Industries. The team has been fortunate to have donated $1,000,000 since 2014. Briar can be reached on her cell at 310-922-4241 or briar@amalfiestates.com.