Hello clients, family, and friends!What a crazy time we currently find ourselves in! From the bottom of our hearts, we sincerely hope that your family's are safe, healthy, and as productive as can be during this time. If you have family or friends who have personally tested positive for Covid-19 we want to extend our most sincere well-wishes and blessings that they make a full recovery, and that this horrible pandemic passes very soon.
We find ourselves in a time where we're forced to reset, mentally, physically, and emotionally. It's a time that should be spent at home with our immediate family; cooking, teaching, talking, and enjoying each others company.
Our Real Estate Teams Inside-Look at the Market and What's Happening
First - Caitlin and I are currently working from home. The "Shelter in Place" orders by the Governor should be respected, and we're not currently showing any property. Our listings that are supposed to be on the market are currently on hold until the "Shelter in Place" orders are removed. Many local realtors are not following these rules, and they're putting everyone in danger. We don't condone this type of business conduct. We also don't believe it's safe to enter into another person's home for sale right now. As a safety measure, don't do it.
From our perspective, there are many buyers who are still eager to see what's available on the market and find a new home. We currently have several buyer clients that have gotten into contractual agreements with sellers to purchase their properties, but those showings took place prior to the Shelter in Place orders. These buyer clients are going to enjoy very low interest rates (more on that later) when the sales close escrow, and those clients of ours got very good offer terms accepted by the sellers.
*There is still very, very high demand for real estate in San Francisco, San Mateo, and Santa Clara Counties. We wrote an offer for a client two weeks ago on a listing that received over 20 offers. Just 10 days ago we were in a ferocious multiple-offer situation where we barely edged out multiple cash offers. Just last month we received 7 cash offers on a listing of ours in Cupertino that was going to be torn down. In short, buyers still see the long term value of owning a home here. Investors are out in full force looking to purchase/ flip/ build/ or hold long term.*
Regarding Sellers - Many sellers have pulled their listings off the market completely, this is simply because the properties can't be shown. We have agents in our office that are continuing to list properties for sale at the sellers' request. In every case that we've heard of, this is against the advice of the realtor who listed the property. We absolutely understand that some sellers "have to sell" thus, they need their house on the market even during this economic stand still. Many sellers are in contract to purchase - or have already purchased- their replacement property and may no longer even be living in the area. No one wants an empty house, and their timing with the Covid-19 Pandemic is unfortunate.
We do also have buyer clients that have decided to wait out the "Shelter in Place" orders before resuming their real estate search, which we understand. Due to the inability to safely view properties, this has become necessary. Many properties are still available to view through comprehensive virtual tours, but in most cases, this still doesn't substitute a physical showing, and writing an offer "site unseen" can be a nerve-wracking undertaking.
Tenant Eviction Moratorium
Almost everyone is suffering financially from this Pandemic. In the event that you're currently a landlord, or you're currently renting the property that you live in, San Mateo County has put a moratorium on evictions during the "Shelter in Place" order which can be viewed in the link below.
https://mcusercontent.com/8c2d3835f37b03ccc4c5a59d0/files/0a84f3ae-27ed-407b-a40a-bc47789edd45/Eviction_Moratorium.pdf
For a tenant to not pay rent, and avoid an eviction, they would still need to prove financial hardship as a result of the pandemic. ***I'm not a tenants' rights/ landlord attorney, and this information is strictly informational. If you find yourself in a situation where you need more information, please call us and we will direct you to the best resource available.***
Interest Rates
For real estate nerds like Caitlin and I, this is a fun puzzle to pay attention to. Interest rates have never been as volatile as they are as a result of the Covid-19 pandemic in our country. On March 2nd, 2020, mortgage interest rates were at a whopping 3.13% which was flirting with historical lows. In just two weeks, the rates had risen more than a full percentage point to 4.15%. Typically in an economic recession, interest rates as a whole drop, so why did they spike up in response to Covid-19?
There's two main reasons, the first, is that many people were trying to refinance when rates bottomed out to 3.13% back on March 2nd. That caused lenders to get overwhelmed with loan applications and phone calls, so lenders raised rates to slow down the rush of homeowners that were trying to save money through refinancing.
The second reason is that mortgages are typically not held onto, and serviced by the lender that originates the loan. The loan is typically sold onto the secondary market to investors as mortgage-backed securities. Mortgage bonds and treasury bonds are thought of as safer investments than the stock market, so when the stock market is swiftly moving downward, mortgage bonds and treasury bonds are a good, safer option for investors. The problem though, is that there's an oversupply of bonds due to all the refinances at the beginning of the month! So when bond prices are down, mortgage rates go up! Are you still with me?
Here's the kicker, the Federal Reserve has pledged to buy-up Five Hundred BILLION Dollars worth of treasury bonds, and Two Hundred BILLION Dollars worth of mortgage backed securities in the coming months. If this happens, they will dramatically reduce the amount of mortgage and treasury bonds on the market and prices for those same bonds will rise, causing interest rates to FALL, and STABILIZE.
Our point here is this.... If you were considering refinancing at the beginning of the month, you're likely going to have a really good opportunity to refinance in the next 3-6 months depending on the timing of the virus. On that same note, we would really recommend that you get ready, speak to a lender, get your paperwork in order, and be ready to fill out the loan application and lock your rate, because there will be a lot of people trying to do the same thing.
OK, my fingers are getting tired, and I need to proofread this article we're writing....
With that said, we sincerely care about each and every one of you. If there's anything that we can do to help, or if you want to chat on the phone, PLEASE CALL CAITLIN or MYSELF. We would love nothing more than to check-in and see if there's any way we can be of service to you.
Thank you so much for being you! and we really really hope to see all of you soon! Stay healthy, stay six feet apart from others, and most importantly, stay positive! This too shall pass.
Kevin Pickett
415.283.7919. Cell
Kevin@PickettRealEstateGroup.com
BRE#01888040
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