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Real Estate and COVID-19

COVID-19, the 100-year flu Pandemic, continues to severely impact our daily lives and economies around the Globe. Several clients and friends have asked about how it might affect the residential real estate market in months to come.

In this article, I will provide my best understanding of what is likely to occur in 2020 and 2021, based on the relevant factors and data. As you read it, be mindful that when it comes to COVID-19, we are dealing with many unknowns. What happens to different sectors of the economy will largely depend upon how well things are handled at various levels of our governments.
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Sellers are embracing the concept of moderation when setting prices!

According to Northwest Multiple Listing Service (NWMLS), Homebuyers around Washington state are making their way back to the market. They are hoping to take advantage of improving inventory, attractive interest rates, and more approachable sellers.

Moderating sales prices of homes in Washington State are caused by a year-over-year improvement in the volume of new listings and total inventory. There was robust activity in January of this year. However, the number of actual sales was a little less than last year. All indications are that strong activity will persist in all counties of the State. Some prospective buyers sat out the second half of 2018. Others were pushed to the sidelines during last year’s heated market. These folks are finding better buying conditions now.
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Research Comparable homes

Everyone involved in buying and selling a home has an agenda. Let’s say a home is for sale in Bellevue for $700,000. The seller is hoping to get the highest possible price. The buyer is hoping to get the lowest possible price. The Real Estate agents are depending on the commission from the sale. The Bank wants the most conservative valuation of the home to protect their investment. The Appraiser is expected to be the one neutral party, with no personal interest in the property, who can provide the most accurate, unbiased evaluation.

To become a Certified Residential Real Estate Appraiser in the State of Washington requires a bachelor’s degree, 2,500 hours of fieldwork over a minimum of two years, an additional 120 hours of targeted courses, and approved training directly under a Certified Supervisory Appraiser.
You would think, after all, that, Appraisers would be very good at their job. And yet, somewhere in the neighborhood of 40% to 50% of Appraisers in the field today do mediocre to poor quality work. Why? The simple answer is that you cannot train people to be creative, and for the most part, Real Estate valuation is a creative process.

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