Project Home: Bay Area Real Estate Market Chilled By Coronavirus Economic Impact
SAN FRANCISCO (KPIX 5) -- It's the spring selling season, which usually means home sales spike and excited prospective buyers spend their weekends jumping from open house to open house, but since the pandemic hit things have gone quiet.
"I mean, who wants to move now? Nobody," said Patrick Carlisle, Chief Market Analyst for Compass Real Estate. He's been watching as sales and new home listings have come to what he describes as "a screeching halt."
"The number of properties that were pulled off the market jumped by 800% in one week" said Carlisle. "The number of properties going into contract dropped like 75% so these are very drastic effects."
For weeks, real estate agents have been optimistic that the California real estate market would remain largely unaffected by the coronavirus pandemic.
When asked if he was worried about the future of the housing market in California, real estate agent Uwe Maercz said, "I'm really not."
"Being invested in real estate, specifically in California and in the Bay Area has been a terrific investment," said Maercz. "We have ups and downs right now of course, but if you take a two, three, four year outlook, I think everybody's going to be just fine."
To Maercz's point, home prices have not gone down and neither have rents, but Carlisle points out the housing market is usually about three to six weeks behind the stock market so the impacts are just starting to show.
"It seems pretty clear that our up-cycle has come to an end," Carlisle said.,
Realtor.com reports there are nearly half as many listings on the market now as there were at this time last year. In the Bay Area, there were roughly 9,500 active listings in early March since shelter-in-place took effect; that number dropped below 8,000 and the number of new listings went from around 1,800 to less than 800.
Carlisle's research shows a typical spring season like 2019, where real estate comes out of its winter slump, but this March he says most people are either afraid to list, or don't have the money to buy.
"People have to have jobs to be able to afford to buy homes or to rent homes," Carlisle said.
Listed homes are still selling which is good news for people who have no choice but to sell, such as homeowner Jeannie Morrison.
"I thought the whole year was going to be totally different and surprise. It wasn't," Morrison said.
In February, her husband Dennis died of health complications unrelated to COVID-19, so she made the decision to downsize. She's moving closer to her son, Jay, who helped her sell their family home of 18 years. They had one open house, then were forced to take the sale and tours online.
"I would say, you know, maybe a month or two months ago, I think our posture would have been a little bit different. I think we would have been a little bit more aggressive, but in these current times there's a little bit more at stake," said Jay Ayers, Jeannie's son.
In some cases, buyers are able to tour homes in person, but only if they're vacant; if someone's living there, you're simply not allowed walk-throughs. In most cases, in-person tours only happen when a virtual tour is not an option.
"So it's been a little crazy, but I think that when someone needs to buy a home, they need to buy a home regardless of what's going on," Morrison said.
As for how long the virus will take its toll on the housing market, like everything else it depends on how long the shelter-in-place lasts.
"There's so many plates spinning that I don't think anyone can predict how it's going to shake out yet," Carlisle said.
Morrison's story is a reminder that despite the virus, life goes on. She's moving forward with newfound empathy.
"It was hard to go through all of that, it was really hard, but there's so many people right now going through this thing, the exact same thing right now. It's just like, I don't feel like I'm alone," Morrison said.