Been a long time Rich. We
Been a long time Rich. We have to catch up on the market. Its been an interesting 10 years. Lots to catch up on. Will try to share an update with everyone as we enter interesting times again once it becomes clearer

So Ive been checking in with
So Ive been checking in with Rich once or twice a year with observations since leaving the asylum several years ago. There is lots of interesting things to talk about again and the long and short of it is for the first time in about 15 years I dont believe I know what will happen. I have pretty strong guesses but with so much uncertainty its hard to commit to anything yet.

I figured Id share the message I sent Rich about a week ago. Since I sent that message RE has been declared an essential service with restrictions that still impair conducting business significantly. It has opened things up modestly but the mechanics of the market are still pretty locked down for now.

Been a long time since I checked in. Hope all is well at home, work and on the blog. Sitting home drinking wine most of the day watching the financial markets and thought of you. Figured Id give you an update from the streets.

RE is in a real interesting spot right now. Even with all the negative news and plunging stock markets houses were selling left and right around my hometown and beyond. It was hard to believe but homes over $1M were exceptionally strong until the shelter in place order came last Thursday. There were 2 or 3 houses above a million going into pending status nearly every day. I am constantly shocked by the strength of our market. Rightly or wrongly people are driven to buy homes around here even in the face of unbelievable negativity.

Then it came to a grinding halt on Friday when a clarification came down from CAR that real estate was non-essential and we were to immediately stop all face to face interactions including appointments with clients, open houses and showing homes. At that point it became next to impossible to buy or sell a home. There were a few stragglers that went pending as negotiations may have been in process and there are a small group flouting the rules but its pretty much locked down in real estate. To put this into perspective since Saturday exactly 1 detached home has gone pending in the entire City of Carlsbad. It was a very desirable 1 story listed prior to the lock down which probably took a few days to work through multiple offers. How they will get it closed is beyond me until restrictions get relaxed.

On cancellations I counted 40 in the City of Carlsbad last week. If I had to guess Id say its been as high as a 1/3 of those that went pending in the prior 2 weeks. They are usually negligible but the uncertainty has sent a significant portion of buyers back onto the sidelines until they get some clarity. That and there is no clear path for them to close as there are questions whether inspections are allowed either. I have one such set of buyers who are in escrow on a listing of mine. They want to buy it but need more clarity with the economy to proceed. It makes no sense for us to go back on market as we cant show it so we are just holding with them for the time being. Its is extraordinarily strange times.

On the loan side, I am hearing things are just fine. The refinance market is rip roaring. Its all done online and not impacted much. If anything they have far more business than they are capable of processing at the moment so most raised rates to slow down demand for now. Im recommending friends and family to hold off a month or two. Long term rates are going to stay low and mortgages are artificially inflated at the moment. Once they get through the current tranche they will lower again closer to 3 to refill their pipelines.

Homes that were in escrow and within a week or two of closing should have no major obstacle to close. I had one close last week. Going forward closings will dry up to a trickle in another 2 weeks.

For your tracking closings should be down quite a bit in March. In April they should be stunningly low. BUt here is the interesting part. It will mean little to nothing regarding the current or long term health of the market. I know people will want to make more of the data then is really there. There are artificial impediments making sales nearly forbidden. There is massive demand out there waiting to buy not only whats on the market but whatever comes on the market that is fairly priced. I think we could see a slight hiccup in prices but anything real would take 6 months to a year to truly show itself. Of course all bets are off if this pandemic turns into a real sh*t show and persists for more than 2 or 3 months. Even then this market is so resilient and has always come roaring back countering the its different this time argument. Barring something cataclysmic Im anticipating we should be fine. There will be lots of noise in the data that wont truly be representative of market sentiment. Long time bears will start crowing but will get silenced shortly thereafter.

For now we all sit, watch and wait and drink wine.

Cheers!

outamojo asked if I see a meltdown coming in residential and I dont. He asked about commercial also and not only is that outside my expertise but its a much more diverse target. Shopping malls, casinos, hotels should get pummeled. Healthcare and cold chain shipping facilities should see boom times. It really depends upon the sub-market in commercial.

Im happy to address any questions but may be slow on the response. Apologies in advance.

Looks like not much interest
Looks like not much interest here in talking about anything other than corona virus but here’s an update on the stats

4 new listings : 2.5 price reductions : 2.5 pendings : 1.5 back on market : 3.5 closing

Any changes to the ratio are likely due to me being more specific in my math. Generally speaking a slight uptick in new listings, price reductions, new pendings, cancellations and closings. Activity is trending back up after grinding to halt. It doesnt feel like there is any real shift. Mostly it feels as though with real estate now an essential service again albeit with restrictions people are slowly figuring out how to get business done again.