Industry Update, March 26
Updated: Mar 28
I hope this reading finds you feeling well, enjoying your home, and staying safe. As our community navigates uncharted territories, I wanted to take a few moments to update folks on how I see things taking shape from a real estate perspective in the Denver area.
For a listen of perspectives on a national level, listen to Dr. Lawrence Yun, Chief Economist & Senior VP of Research at the National Association of Realtors in this podcast from March 18:
March 26, 2020 Colorado Issues Stay-at-Home Order
Governor Polis issued a Stay-at-Home order which became effective today for the entire state of Colorado. Under these orders, real estate has been determined to be a critical business. This does not mean "business as usual," but it does mean that real estate brokers along with our industry partners (inspectors, appraisers, title companies, banks, moving companies and other critical businesses) can continue to offer services to clients as we comply with health department guidelines mandated by local and state government officials.
The government is adding flexibility to meet the changing needs of our current environment. Yesterday, Fannie Mae issued Lender Letter LL-2020-04 which provides temporary allowance of exterior-only and desktop appraisals for many transactions. I think this is a wise step that should alleviate avoidable delays in transactions. Governor Polis is also being asked to issue an Executive Order that allows virtual notary services in Colorado so that buyers and sellers can conduct closings remotely.
The banking sector is adding additional employment verification requirements on conventional, FHA, and VA loans which now includes confirming a buyer's ability to work from home 5 days before closing. Non-standard programs such as jumbo loans are being temporarily suspended.
As we all adapt to rapidly evolving working environments, inventory shortages in the metro area remain real. Market activity and buyer/investor demand is high. Obviously, things are are fluid. To help make sense of the current local real estate market conditions you are invited to check a Weekly Snapshot of Metro Area Market Activity right here on my website.
The page is updated every Sunday and detail all transactions inside my brokerage, RE/MAX Alliance. We are the largest Brokerage in the front range and have 24 offices across the metropolitan area, so the snapshot comes from a reliable footprint of local market activity.
What Does Marketing Real Estate Looks Like During this Period?
Brokers are quickly implementing innovative methods to show homes and market properties as they take precautions mandated by state and federal agencies:
Virtual marketing. Homes are being virtually marketed via video tours and 3D interactive property scans. Agents are using FaceTime, Zoom, and other video technology to virtually show homes to interested buyers. Traditional Open Houses are being replaced with virtual ones.
Virtual meetings. Brokers are conferencing via virtual meetings and video calls instead of face-to-face visits. When in-person meetings are necessary, agents maintain safe distances and non-essential parties are asked to stay away.
Planning ahead and being prepared. Buyers should expect that scheduling any type of showing will take more planning and lead-time. Overlapping appointments have been discontinued. Buyers could be requested to submit their purchasing qualifications (lender letter, proof of funds), and be asked to answer standard Covid-19 health questions before being granted access to homes.
Essential people taking precautions. Showing instructions and flyers on front doors may set requirements for entry. Buyers should expect to be instructed not to touch surfaces. Showings might be approved for only the buyer(s) themselves along with an agent. Children, relatives, and friends are likely to be asked to stay away.
What Does All This Mean for Real Estate Transactions?
We are all in uncertain times, adapting to an evolving working environment. Cooperation between buyers, sellers, and industry professionals will be necessary to get us through this period. People may appreciate added protections during this time.
More space to work. Inspectors and appraisers will need to take precautions too, wearing booties, masks, and gloves. Non-essential people may be asked to stay away and await a report. Any person who must be on-site will be asked to stay at least 6 feet away at all times, or even outside the home, during the inspection.
More communication and cooperation. To get a transaction to the "contact-less" closing table, buyers and sellers may need to cooperate by agreeing to contract extensions for matters outside their control. More transactions may close on a 35- to 45-day window, instead of 30-days or less. Buyers with loans should be in contact with their lender frequently for updates, and be ready to provide necessary information before closing.
Added assurance welcome. Buyers and sellers both may want added assurance before entering a contract. Those assurances could come by way of lower earnest money amounts or by agreeing to extended objection deadlines. While some sellers may feel uneasy about some of these ideas at first, they can take confidence that buyers have a lot of skin in the game. Buyers still must perform to their specific contractual obligations and pay for inspection, appraisal, and lender fees all along the way. And consumers in Denver really want and need homes. Our inventory shortage is real.
Three Thoughts on Selling, Today:
If the last two weeks have taught us anything it’s that we never know what’s going to happen in the future. If the crisis is protracted, the best advice could be to sell sooner rather than later. Do your research and consider if there is a way to reside outside your home during its marketing period.
If your plan includes moving out of state, connect with a Realtor on the ground to inquire about local guidelines as well as housing, lodging, and storage availability. Ask about the possibility of virtually touring homes while you are still in Colorado.
Amidst all the uncertainty, one thing is clear. Our real estate market today is completely different than it was in 2008. Denver’s inventory shortages are real, lending requirements are extremely strong, and buyer demand is very high. None of these things are expected to change anytime soon.
Ten Safe Things To Do As You Stay-at-Home
If you own your home and are concerned about making your payments, research mortgage payment relief programs today. Call your loan servicing company as soon as possible, even if you're able to make payments now, but foresee financial issues coming. Don’t wait until your payment is late to call. Options are limited after a loan is in arrears.
Get pre-approved for a home loan and create a budget.
Go outside. Play or work in your yard.
Plant some seeds. It feels good!
Teach your dog some new tricks. Don’t have a dog? Apply to foster or adopt.
Call someone you haven’t connected with in a while.
Educate and rejuvenate! Taking precautions and doing our part means changing behaviors but doesn’t mean staying inside all the time. Let’s take this time to be smart and take care of ourselves, too.
How Can I Help YOU?
Even though we will be operating under new rules for a while, I am still here to help with any questions you have or simply be an ear for you to air any concerns. Give me a call or send me an email. If you like, we can set up a meeting to chat live and connect virtually.
As we continue through this challenging time, the world will continue to spin. Real estate will still be bought and sold; the process will just be conducted through new technological means. The challenges facing us are unprecedented, but they are not insurmountable.
We are all in this together and I am committed to serving my clients, community, and doing everything I can to help people move forward.
Michelle Schwinghammer is a REALTOR®, Certified Negotiation Expert® and Pricing Strategy Advisor® who helps people move forward in Colorado.
I HELP PEOPLE MOVE FORWARD.
Schwingstate, LLC, 30480 Stagecoach Blvd, Evergreen, CO 80439
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