But not to worry, It’s going to take some time to sort through the COVID-19 pandemic and its myriad consequences, agree agents Gregg Whitney and Scott Booth.
“It’s almost premature to say anything that’s going to give much insight as they’ve pretty much barred real estate agents from working for the next two weeks,” said Whitney of La Jolla. “They’ve shut down everything right now.”
“It’s definitely been slow the last couple weeks,” noted Booth, who sells real estate in both Pacific Beach and La Jolla. “We had some deals that were in escrow that got canceled. Not a lot, but a few. Some of it was coronavirus fear. Some were (shortage of) cash to close with the stock market being down. People don’t want to sell their stock at such a huge discount to buy a house. They’re just holding off for now.”
Whitney, however, feels this market pause “is a good thing.”
“Everything is slow right now,” he noted. “But we’re still selling property, though it’s a little bit more of a trying time.”
“The world is going to change after all this,” predicted Booth. “As far as real estate goes, I see a little dip, temporarily. As long as this all passes, there’s still a lot of demand – and not a lot of inventory here at the coast.”
Whitney suggested we may have to wait until July to get a good read on what’s really happening now with San Diego coastal real estate.
“It’s hard to really gauge the market right now,” he said. “Hopefully, this virus will peak out by July, and then we may end up seeing interest rates come down considerably in the latter part of this year. The feds are doing everything they can for the market on the commercial banking side with the $500 billion stimuli they did last week. They want to keep printing money as quickly as possible.”
Booth concurs that what impact the virus is likely to have on the housing market could “hinge on what the banks do with interest rates. “If those rates creep up, and there’s still a lot of demand, there still won’t be a lot of inventory,” he said. “But I really don’t see that being the case here. It’s just people being cautious.”
Added Booth, “In the short term, I see a huge slowdown in real estate sales and pricing. As long as people still have jobs though, I think it will be good.”
Whitney pointed out he’s optimistic that “once we get through the next four months,” the real estate market will return to normalcy because “people need to buy and sell homes, though they may be downsizing and staying closer to home, which bodes well for us agents.”
Noted Whitney, “I think it will be a vibrant market for first-time buyers because interest rates are really good, and there are opportunities for first-time buyers. Unless unemployment spikes up, it could be the best opportunity for first-time buyers in a decade or more.”
On the high end of the real estate market, Whitney noted that buyers may be persuaded to “just take this price right now. I don’t think they’re controlled as much with stock. They’re pretty well insulated. They can sit on their property if they want to.”
Added Whitney, “In past marketplaces, it’s typical for people on the high end to stay put, because they have insecurities with the market. So they’ll just rent it (property) out until the stock market clears up, then, a year from now, put their property back on the market.”
Whitney suggested there may be a new “dynamic” at work, should interest rates fall below 3% the latter part of this year.
“Then, they’ll get good value,” he said adding, “We may have to go eight to 12 months, with a coronavirus vaccine on the horizon, to get a good valuation in this market. Lower interest rates may drive people back into the market. It’s just really hard to see exactly what will happen after just four months. It may take some time before we see some clarity in the market.”