Given the fast-moving issues regarding the Coronavirus in our region and how it has and will impact real estate activities moving forward, here are some clarifications and observations as to activities that will be suspended vs those which appear to be allowed even under “stay at home” declarations (which are starting to appear in our major counties). We are strongly advising clients, our staff, and our agents, to adhere to these guidelines in the interest of getting through this challenging time. What follows is a brief discussion on current logistics, our presentation of activities critical to real estate closings that the government considers “essential”, some macro information on what conditions looked like heading into this, up to date through today, as well as our thoughts on the next few weeks
Logistics: Real estate transactions were caught mid-stream during these past weeks’ growing restrictions. We had parties in mid-relocation, etc. and fortunately were collaborating with agents and clients on our many virtual platforms as a normal course of business in what until about 14 days ago was one of the most robust real estate marketplaces in North Carolina history. We were one of the first firms in the state to go to a virtual agent network many years ago and are well suited to work from today’s best cloud-based platforms. Additionally, our key staff personnel have been equipped with laptops for several years and are used to collaborating remotely from home, as well as virtually. We discontinued group meetings several weeks ago, enacted strict office visitation protocol and have been practicing CDC and Johns Hopkins protocols for several weeks. We are digitally transacting current contracts, displaying listings, and transmitting and processing offers digitally for e-signatures. We also have extensive digital marketing capabilities due to our robust HD photography, drone video, and social media sharing capabilities, which are increasing in engagement daily. At this time, in many of our major counties, stay at home rules are falling in to place and/or will be enacted shortly, and our team is prepared to continue to conduct business as permitted from their personal home offices while observing the stay at home declaration.
- Tours have been completed by our agents via FaceTime and by drone video
- Contracts and paperwork are being processed end to end in Dotloop, our cloud-based e-signature program, allowing “in-process” transactions to proceed
- Precautions have been taken to sanitize and control surface contacts during inspections, surveys, etc. and those county-determined “essential steps” have for the most part proceeded and are deemed essential so far, even in shelter in place environments
- Attorneys have their staffs working remotely, which allows them to research, process, and conduct closings with minimal contact and thus far they’ve done a tremendous job minimizing closing disruptions
- County recording staffs have been working remotely, and in combination with legal staffs, that has so far allowed closings to remain on track and we anticipate that this can continue
- Banking, finance, and other closing related activities are also considered essential and are for the most part moving forward as are inspections
- Our state association has prepared an addendum which allows for both parties to agree to a contract extension specifically conditioned upon unanticipated shutdowns or delays due to Covid-19
What Has Transpired:
- Over the past two weeks, Mecklenburg County and surrounding counties that make up the metro area, have seen 1536 contracts placed on houses. 810 two weeks ago, and 726 in the last 7 days. Showings have deteriorated by about 50% and we anticipate this dropping further but not stopping completely absent a shelter in place order.
- This 1536 total in new contracts, also came at a time when 1255 new listings came on the market, so in effect, inventory has actually dropped slightly over the past two weeks.
- We came into March with just over 7000 homes on the market in active inventory. By comparison, last March considered a healthy one in terms of conditions, we had over 11,000 actively listed homes. We believe this critical shortage gap may help the region over the next few months to avoid pricing instability depending upon the duration of the minimized activity
- Below are three charts depicting this dynamic, the past two weeks’ contracts vs new listings, first by the past week and week before, then a total, and finally, Charlotte regional MLS total inventory trends comparing last year to this year’s total homes listed for sale and trendline
- It is not easy to predict day to day but areas with “stay at home” orders will likely see in-person showings stop temporarily:
- We believe most closings will stay on track, pending the availability of vendors to handle vital hurdles such as inspections, surveys, and legal work all of which is deemed “essential”
- Virtual video tours are rising rapidly which we believe will keep people engaged in the viewing of real estate provided the containment of the virus does not become a prolonged exercise that inhibits “in-person” activity late into the summer
- One of the unique variables in this downturn is that it has also impacted inventory levels from rising as people elect to hold off listing their homes, which should also serve to limit the development of distressed inventory as we saw in 2009, at least in the short run. Again, inventory levels 3 weeks ago were 4000 homes short of last year’s supply at the same time. Where that fundamental measure of supply then heads (given it was in critically short supply in many areas two weeks ago) over the longer duration, is harder to predict. In the short run, it should allow for some cushion and pricing stability. The longer-term 3 to 5-year viability of the region remains pretty unquestioned. This leaves the medium-term six months to a year out picture more dependent directly on containment and duration questions, both of which are up in the air currently.
We will continue to provide updates frequently to help our team and clients understand the shifting seas we are all navigating. Stay safe out there, exercise spacing in distance, and let’s all try to get this thing out of our communities as quickly as possible.
Lori Ivester Jackson