Dick Law: During 45 years of working in local real estate, I’ve never seen anything like this
The COVID-19 pandemic has forced dramatic changes in the real estate industry, which was deemed an essential business by the governor and his health advisers when the coronavirus first hit the United States.
Areas such as ours are called “Zoom Towns,” an acknowledgment that Zoom and other video-audio conferencing platforms are changing the composition and culture of rural areas due to urban flight. People who are able to telecommute are relocating to regions more desirable than the cities and suburbs where their companies are located. Nevada County boasts many of the amenities coveted by that niche market of remote workers, and the exodus of city dwellers is boosting local home prices and residential rents even higher.
The demand that is driving up prices will continue into 2021.
A growth of the telecommuting trend is an exacerbation of the current glut of office space. Why go to an office if you can work from home?
Commercial real estate is not in high demand, and construction of projects such as office buildings has nearly crawled to a stop.
Yet as with all things, creativity can breed success. I know one local commercial building that has been 60% vacant for the past decade, but it’s now seeing new life. Its owner is reconfiguring the space to include a varied menu of options, from executive offices to shared cubicles, all with incredibly fast internet service. The building is now a hot spot.
Before they begin to view properties, potential buyers sign forms acknowledging possible risks. The California Association of Realtors released dozens of pages of disclosures, declarations, and best practices designed to keep customers, as well as Realtors and brokers, as safe as possible.
After seven decades of an open-door policy, Paul Law Realty now works with our door closed. Upon appointment, we meet with customers outside on our porch. In many ways, business has become more hectic and fast paced.
In other ways, we have slowed down and taken steps to be extra careful. My staff and I work with clients to establish a list of properties potential buyers want to see with a serious eye to buy, and not embark on long days of perusing homes that may not meet customers’ needs.We teleconference. We discuss details and options. Marketing tools such as virtual home tours used to be luxuries. Now they are essential to successfully promote properties for sale.
Without more government financial intervention, some homes and businesses are likely to fall into foreclosure or face short sales. Contrary to popular belief, there is no eviction moratorium in our state.
Eviction rules are ever changing, by the Legislature or interpretation of the courts. Tenants in California are currently required to pay 25% of their monthly rent, as long as they sign an agreement acknowledging they are obligated to pay past-due rent.
Those tenants are immune to eviction, but landlords are not immune to their mortgage responsibilities. Unless changes are made to existing procedures and regulations, some landlords will lose their properties and some owners will lose their businesses.
Some tenants will be evicted, and that black mark will remain on their records. Unfortunately, some people worry the future end result may be an increase in homelessness.
Sellers need to know
More than ever, sellers must have their house market ready. Eager buyers don’t want surprises. They don’t want to wait for inspections that could have been done before the property was listed for sale: termite inspection, whole house inspection, well testing for water quality and production, septic pumped and inspected, etc.
It’s also incumbent on home sellers to have their properties professionally staged. Even in a seller’s market in which most offers exceed the asking price, it’s vital to have a home that appears on paper and from the curb that it’s move-in ready.
Buyers need to know
In this hot market, buyers must be ready to buy. There’s no time for lookyloos; they lose every bidding war. People moving from out of the area are wise to choose a local Realtor who is an expert in the local market and can easily share comparable properties. In that way, buyers understand the value of the property on which they make an offer.
Buyers should be pre-qualified by a lender, and preferably a local lender whose reputation is on the line with every transaction. Local lenders know the local market and choose local appraisers who understand local market nuances.
An out-of-town appraiser doesn’t understand the intrinsic benefits of, for example, access to a Nevada Irrigation District ditch or connection to the PG&E grid that serves the hospital.
As our nation continues its buying sprees via the internet, warehouse space will remain scarce as companies seek procurement centers as close as possible to customers’ homes. Large spaces that can accommodate manufacturing businesses will also remain in limited supply and high demand.
The urban exodus that has seen many remote workers relocate to Nevada County has hyper-energized our home real estate market.
Previously, there was a glut of homes priced over $600,000. Now there is high demand and a shortage of inventory in that price range. Some people relocating here from more expensive cities consider local prices “chump change.” They plan to telecommute and earn as much as they did in the Bay Area, while selling their expensive homes and buying a house here for much less.
Paul Law Realty has existed for seven decades, and I’ve seen many ups and downs during my tenure here. I’ve never seen a market like this. We need all hands on deck because the market is so active, yet COVID-19 has tied one hand behind Realtors’ backs.
Dick Law is the owner and president of Paul Law Realty, a third-generation Nevada County real estate agency specializing in home sales, commercial property sales, and investment property management. He can be reached at 530-212-0710 and Law@DickLaw.com.
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