What is happening in our local real estate and financing world?

By Lorette Murphree

With the stay-at-home orders of March 19, how can someone sell a house?  How can someone see a house they would like to buy?  Are property prices dropping? Are the mortgage rates super low?

Here is a brief summary on how the California Association of Realtors has implemented procedures on March 28th to keep the real estate market going and to keep all sellers, buyers, agents, appraisers, inspectors, etc. safe.

After a brief 10-day period during which real estate could only be transacted “sight-unseen,” an amendment to the original order was made on March 28th, identifying residential and commercial real estate as “essential services.”

With that, C.A.R. has come up with the following procedures under which agents can safely assist clients in buying and selling real estate:

• It is now mandatory to sign a new Corona Virus Property Entry Advisory and Declaration form. Buyers and sellers, as well as appraisers, inspectors and anyone else accessing the property need to sign this prior to entry.  The person signing this form declares that they are aware of the stay-at-home order, that they are not sick and that they understand the risk they take by allowing entry to their home or entering into someone’s home.

• This form needs to be fully executed prior to an appointment takeing place.

• Virtual tours should be created where possible

• Showings should be virtual, if at all possible.  Or, buyers should first see the virtual tour prior to ºchoosing to go view a property.

• Showings are by appointment only. NO open houses.

• All offer, negotiation and signing activity should be done virtually when possible

• Only one agent and no more than two people are to be in a dwelling at the same time.  No more than three people total.  Sellers should not be in the house when potential buyers come to view.  If the house or condo is small, 1 or more persons may need to take turns.

• Agents will not drive with clients in a car.

• Lock-boxes, doors and cabinets will be disinfected before and after showings

• Either the seller, or in case of a vacant property, the agent will turn on all the lights, open all the doors and cabinets prior to showings so no one needs to touch anything.

• Safe 6-feet distance must be maintained.

• Everyone needs to wear mask and gloves.

• Mortgage guidelines have drastically changed during the last two months, so a buyer should have a lender pre-qualification in hand that is no more than one week old.

How is this affecting the market?

With these rules in place, market activity has slowed a bit a some areas, but has continued in a fairly robust manner in our area.

New properties are being listed and going into escrow and are closing almost daily in our and surrounding markets.  Some sellers are waiting to list and because of this, a further lack of inventory has been created. So now, when listings are priced at market value or below, they are getting snapped up fast.

Here is what may be surprising:

In the last 45 days, statistics for single family residences:

Seal Beach: 10 new listings have come on the market, 9 properties went into escrow and 19 properties Closed/Sold (13 of these went into escrow after the stay-at-home order)

• 170% over the previous 45 days total volume

• 128% over same period in 2019 total volume

Belmont Shore/Belmont Heights: 15 new listings, 18 properties went into escrow and 34 properties Closed/Sold (22 properties went into escrow after the stay-at-home order)

• 109% over the previous 45 days total volume

• 132% over same period in 2019 total volume

Sunset Beach/Surfside: two new listings, one went into escrow and two closed/sold (1 went into escrow after the stay-at-home order)

• same as previous 45 days total volume

• 143% over same period in 2019 total volume

Los Alamitos/Rossmoor: five new listings, nine went into escrow, 15 closed/sold (seven went into escrow after the stay-at-home order)

• 102% over previous 45 days total volume

• 121% over same period in 2019 total volume

Some of this may simply be because we were coming out of the winter months and into a spring market, but remarkably, the last 45 days were better in each of the neighborhoods then the same 45 days in 2019.  These numbers certainly indicate that the local real estate market does not seem to be impacted by the corona virus as of this date.

Prices are also holding fairly steady.  The majority of the sellers are listing their homes off of comparable sales within the last 3 months, like usual.  Only 13% of sellers have done a price reduction after listing their home in the last 60 days.

Inventory is still very low, demand is still high and conventional mortgage rates are at record lows, hovering just above 3%.  Some loan programs are no longer available and others have tightened their underwriting guidelines during this time, so make sure that if you are in the market to buy, you maintain close contact with your mortgage provider to ensure the program that you were pre-qualified for is still available.  In some cases, new alternative programs are available.

If you are not looking to buy right now, it certainly is a great time to consider taking advantage of the low rates by refinancing.

Lorette Murphree is a Seal Beach resident and Realtor. Her husband Matt Murhphree is a past president of the Seal Beach Chamber of Commerce.