Clearly this crisis is not only a health crisis but unfortunately, a financial crisis as well. Of course, financial crises have the nasty habit of becoming problematic for real estate sales.
Although many of my clients expect me to predict the future, I am sorry to remind you – I cannot. However, this is not my first time navigating turbulent real estate climates. In my short real estate career of 25+ years I have worked through 5 significant market disruptions. This first was the dot com bubble burst. Real estate prices dropped, and sales slowed way down and stayed down for months. Next came the Los Angeles riots which coincided with the Northridge earthquake– so I count those two events as one. Also included in my list is the World Trade Center bombing, the subprime mortgage meltdown aka The Great Recession and now we have the CoronaVirus.
A client told me yesterday that since the trade center bombing has become known as 9/11, the virus is being called 3/11.
In these past 5 disruptions, Santa Monica was unique in that real estate prices held longer than other areas and when they did drop, they dropped less, and recovered faster.
If you are,or were, seriously considering buying or selling real estate in near term, are you feeling uncertainty and confusion right now?
Here are my thoughts and observations on Santa Monica real estate in the time of 3/11:
- There have only been 5 price reductions and 1 SFH removed from the market in Santa Monica since 3/11/2020. Maybe there will be many more to come but as of this moment on 3/25/2020, this is a fact.
- If you had a strong reason to buy or sell, and if your motivation has not changed, there will be some folks making what seem like very low offers. If you have to sell – take the offer! If you can weather this storm, remember that people tend to have short memories of these disruptions, but (and this is a big but) the longer the lockdown and general business closures run, the longer the impact on real estate sales.
- Based on my experience working through many real estate deals during the previous disruptions, this disruption will be short– 3-6 months.
Closing thoughts – my office and I are committed to our clients, friends and neighbors. We are calling through our database and checking in with you. If you are feeling stir crazy, check out our virtual showings @PHSrealty instagram. In the meantime, if you need something that we can provide (free local delivery), call us!