How COVID has affected our Real Estate markets.
(00:01):
Welcome back. In this video, I’m going to talk about how COVID-19 has impacted our real estate markets, and how you should be setting expectations with your clients, based on our market realities.
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Okay, we’ve talked a lot about curves within the COVID-19 pandemic. And what I want to do is share with you a couple of different curves, one representing buyer demand, and one representing supply, which is what we have as listings in the marketplace. So let’s take a look at a couple of charts, and we’ll go from there. Okay, in this chart, what we’re looking at is new pending contracts throughout the entire Northern Nevada region. So anytime a home goes under contract as a new pending, it is reflected in this chart. And what you see here is a blue line, which represents 2019, and the red line, which represents 2020.
(00:58):
And so, right about in here is when we started with the shelter in place. We came down and had almost a perfect V recovery, and then some, as we know. So shortly after we recovered from the immediate shock and the shelter in place, early May, we started far exceed activity in the marketplace with regards to demand. And that has not really changed, although we are coming down a little bit here, as you can see on a seasonal basis up through October 12th, October 18th, week ending. This is part of what’s driven prices up in the last several months. And you can see, we’re way ahead of the curve on this.
(01:38):
Okay, on the listing side, which represents this available supply in our marketplace, we also saw listing activity go down. But it never recovered fully, much like we saw demand or new pending contracts go up. And so, this long slow recovery that you’ve seen here, that just has now caught up with where we are on a seasonal. As we started to slow down on a seasonal basis is why the markets are so tight, and why the markets are seeing price appreciations so strongly. Because we’ve had a great imbalance, a lot of demand, as you just saw, and shortened supply, lessened supply.
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In a nutshell, what’s happened is our new pending sales have gone up 25% over the same period in 2019, from the time that we started the shelter in place. During that same period, new listing activity is down 22%, since we started the shelter in place back in March. So in aggregate, we’re 47% off. If you combine these two numbers, we’re 47% off as we sit today, based on where we were in 2019, since we started the shelter in place on March 16th.
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Next, I’m going to talk about how you advise your client based on these facts and numbers. So if you’re working with buyers, and we’re in this very tight market, which is very competitive, I would tell you that number one, you have to make sure you’re setting expectations with that client. If you’re not setting expectations with your buyer client, and they don’t know what to expect with regards to the level of competition and what they may need to do in terms of how they’re running an offer to compete, to get her home, it’s likely they may become frustrated or dissatisfied with your services. And bounce off to a different agent. So it’s critical that you get ahead of the curve, set expectations with your buyers. Let them know that you’d expect, potentially, to see multiple offers, homes in the market for a very short period of time. And that they will need to compete, more than likely, in order to buy a home that has good value in today’s marketplace.
(03:47):
If you’re working with a seller client, it’s really important, separate from all the health concerns and restrictions that we have with showings and whatnot, that they do understand that this is a great time to be selling our home, based on those charts I just shared with you. Now, we’ll talk about this in a future video, but it’s really important that a seller does not just put a home in the market and take the very first offer. So I would suggest that you have your sellers have the homes exposed in the market for a short period, before they actually respond to any offers, to make sure that they’re getting the best offer. And giving the market some time to see the home and give them the best value and the best net proceeds you can possibly get for them.
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Setting these expectations is really key for us as real estate agents out here in the field. Because if you don’t do that, even though it’s a tough market condition, you’re going to make a lot tougher on yourself. Potentially, losing clients or not meeting expectations for your clients.
(04:42):
Okay, guys, I hope this has been helpful. I get asked these questions a lot by my agents. We share these numbers and talk about strategies on a weekly basis. Just want to put this out for you to take us a snapshot look. I hope it’s been useful. We’ll see you next time. Have a good day.
