update real estate "market" trends

House (residential) real estate market

Will wait until the end of the week for “April” sales and listing activity.

So far listing are up slightly 7.5% and sales are down dramatically in Windsor (64%) but modestly in SE Michigan 6.5%.

My guess is that there will be a “lag time” with “sales” being completed on contracts dated January through March but closed in March, April and May 2020. These are buyers that feel they MUST complete the sale. In SE Michigan the industry average for earnest money deposit is 3% rounded. In Windsor typically the deposit is $1k over $300k = less than 1%. Buyers may look at the minor deposit as an option rather than a “must close”. Simply blow off the deposit or have negotiated an extension due to pandemic.

The “value” of real estate will, as usual, depend on the demand-supply ratio. The SE Michigan MLS (Realcomp) is the 7^th or 8^th largest in the USA. Law of large numbers works well with 16,000+ agents and 7,202 sold (closed) in March 2020. This compares to April to date (27/30 days) at 3,668. Let us round that to 3800/7200 =or a decline of 48%. These are special times and we will not get a better picture until June when the April and May statistics are complete. Also, expect that the real estate industry will open back up over the next 2 months.

If listings continue to rise and sales continue to fall, Then expect deflation in real estate values as a result. There are many other factors that enter into a market including but not limited to pent up demand, interest rates, mortgage qualification factors (20% down vs 5% e.g.), Spring vs holiday season, consumer confidence (UofM) and employment. None of these, however, is as important as the old fashioned economic rule of demand vs supply.

How to show a vacant house safely

Realtors and Property managers can operate on a limited basis during the Pandemic. Cautions are in order; however, we are in basic needs business of “shelter” as in Food, shelter and clothing.

Instruct your prospective buyers or tenants to keep driving by the outsides. If vacant there is a big advantage during this Pandemic. Prospect can peak in the windows if vacant which would be inappropriate if occupied. If a buyer or tenant wants to see the inside here are some ideas to be safer in doing so.

·        Qualify your prospect. No sense leaving your home if the buyer or tenant cannot complete a transaction. This is not a time for a noisy neighbor showing.

·        Set the appointment at least 2.5 hours ahead or behind any other showing. This will leave time for any airborne particles to dissipate.

·        Have the seller or as a Realtor place Clorox or Lysol disinfection wipes at the front door entrance. Might also add a spray disinfectant medical gloves and shoe covers. Some Realtors have been supplying shoe covers for a long time now.

·        Realtor shows up early in a separate vehicle. Normally to drive the prospect is better, but during the pandemic, stay in your own separate vehicle.

·        Realtor has gloves, a normal mask, and his/her own disinfectant wipes. The Realtor uses the wipe to clean off the lockbox and key as it is presented. Then opens the door with the key inside the disinfectant wipe.

·        Realtor can walk through with shoe covers and turn the heat/AC to comfort zone, unlock side or rear doors, turn on lights where needed, wipe all door handles, light switches, and cabinet knobs that a buyer or tenant might touch.

·        Realtor goes back to his/her vehicle alone and waits for the prospect to show up or instruct the prospect to stay in their vehicle with a “wave salutation”. Remember no personal contact and stay your distance.

·        The buyer is instructed via a cell phone to use the front door that you have just disinfected. Ask each person entering the house to take a wipe when then enter. Children should not enter the house. They should use the disinfected wipe in their hands between the skin and any doorknob or anything that they touch.

·        Instruct the prospect not to touch anything that is not important to them even with the disinfecting wipes in their hands.

·        With Zoom or Skype or Facetime the Realtor can participate in the showing from their vehicle. A buyer might focus on an item like the furnace and ask a typical question. The Realtor seeing what they are focused up can answer typical questions. Or the buyer might say, “I don’t like the blue carpet”. The Realtor would have the opportunity to overcome small objections.

·        After the prospect has completed their tour they should get back into their vehicle.

·        The Realtor then has a special duty during the pandemic to re-enter the house and wipe down anything that the buyer may have touched. Don’t’ forget the appliance handles, faucet handles, toilet handle inside and outside door handles of all sorts including but not limited to interior, exterior, closet, garage, and cabinets. Even any pull chain that might have been used.

·        Realtor needs to be extra sure that the key, lockbox and front door handle is wiped with disinfectant when he/she leaves.

·        The rest of the transaction can be done from the Realtor’s home computer using DocuSign or other internet authorizations.

We do acknowledge that there is always some risk. Some mistake, a momentary lapse in the procedure, so putting showings off is the safest procedure. I agree with the government and health department rules, regulations and recommendations. Still, I think that Realtors can operate on a reduced basis.

Showing a house that is occupied is another story. 

Thomas Goebel is an international real estate consultant with offices in Plymouth Michigan, USA, and Windsor Ontario Canada. Look for more info on this site soon.

705 S Main Plymouth MI, 48170 USA

734-453-7000

TomEgoebel@Gmail.com