Friday, May 22, 2020

The Natives are Getting Restless

Washingtonians are getting a bit restless these days. The Governor's iron-fisted lock-down is losing support faster than the devil on Sunday morning. Several of Washington's counties are already in Phase II of the Governor's planned re-opening ahead a schedule due supposedly to favorable new cases and such. Locally Clark County is now eligible for an early move to Phase II making us the first of the urban counties to be so granted.

Governor Inslee is up for re-election and I can only imagine he intends to win. Pissing off 75% of the voters is not an ideal way to win an election that is but five months away. The governor has to balance public safety with the will of that public to comply and compliance is starting to run thin on patience.

Phase II will allow for a partial reopening of restaurants with strict guidelines to keep with the notion of social distancing and general safety. This move into Phase II will definitely help economic conditions and that of course will help keep real estate stable through the summer.

Our market continues to be stable despite a massive overall slowdown in activity. I have been on about this since the dawn of this pandemic. Real estate is not unlike most economic models in that it is largely driven by supply and demand. In a typical economic cycle demand is the driving side that moves the market up or down. A slow economy tends to slow the demand for housing by reducing the number of qualified buyers. But this pandemic has actually led to a reduction in both willing sellers as well as qualified buyers. When both the supply and demand drop simultaneously then the market tends to be flat rather than drop. Real estate agents are feeling it because there are less sellers and less buyers which in turn reduces the number of transactions taking place in a given month. But buyers should not expect to strut around like a rooster in the hen house because sellers are holding their ground. Well priced homes are still seeing multiple offers.

So long as this remains the case we have a very good chance of seeing a nice recovery in real estate because the the end of COVID-19 will likely lead to a rise on both sides of the supply/demand chain.

I really hope that this Corona virus settles down so we can all get back to work and back to being productive and in a healthy environment.

Friday, May 15, 2020

Well Priced Properties Go FAST!

For nearly a year now, the real estate market has been in a state of near neutral conditions, favoring  the buyers or sellers with a sliding scale from entry level slightly favoring sellers to upper end slightly favoring buyers. That has not changed even with the COVID-19 pandemic. A well priced property will sell and if that property is priced below the local median it will sell quickly. Local median prices fluctuate in Clark County between $350k and $450k depending on the area.

There is an opportunity for sellers and buyers in that the overall market is slower than normal, there are fewer homes being listed and fewer buyers bidding. So pricing is steady but the atmosphere is a bit more relaxed. It's a good time to be a buyer or seller because your agent should have a little extra time since volume is down.

There is always opportunity in real estate when you keep your eyes peeled for it. One part of the market that seems to be softening up is the fixers. Most buyers right now are looking for something turn key, move in ready. So looking for something that needs a little TLC could produce an opportunity to get a bargain. Don't expect a crazy bargain though, this market is too large to let a good deal go unnoticed.

Stay safe and let's hope the Governor's phase 2 plan gives us a little more room to stretch out.




Friday, May 1, 2020

Governor Expected to Announce COVID-19 Revisions

* Note of correction: I mention below Governor Inslee is up for reelection in 2022 he is actually up for reelection in 2020

Before I make comments on the upcoming information from the Governor's office, real estate is still chugging along at a slow but measured pace. The slow down is seems to be equally distributed between buyers and sellers keeping the market in balance and prices steady. This is good news for real estate at a time that many industries are seeing hard times in the face of this pandemic.

Sometime today Governor Inslee is expected to make an announcement regarding the May 4th revision to his COVID-19 response plan. Although the governor's office has suggested some loosening may come, it is highly unlikely that any changes will be that significant. This is where the governor will make or break his entire career.

This virus is a genuine threat and measures were needed and still are needed to protect the health and safety of Washington residents. Finding the balance is not easy but as they say, that's why he gets paid the big bucks. It is times like this that truly test the leadership of government executive officers. I do not envy the position Governor Inslee is facing. This could go so very wrong that voters anger lingers all the way to the 2022 election or worse yet, a recall of the Governor.

Washington residents have been fairly patient these last 6 weeks under a fairly heavy handed approach to containing this virus outbreak. Now with news circulating out of New York that this virus is not quite as deadly as originally thought, the governor best tread carefully. If he goes too strict he may face a challenge for recall or maybe worse. But if he goes too soft and there is a relapse of the virus he could face equal scrutiny. The governor needs to show an understanding of the health risks measured against known risks of economic collapse on the health and well being of the state at large. Trading a million or more Washington residents livelyhood and or lives, though economic loss of job, health care, housing, and other fundamental life necessities in exchange for "potentially" saving a few thousand lives to COVID-19 may not sit well with voters of either party.

I hope the governor sees fit to allow the bulk of the workforce to return to work with some COVID-19 safety conditions. I do not think any kind of close quarters events should be allowed yet, but there is no reason restaurants and other establishments should not be able to at least operate at partial  capacity allowing for social distancing and with proper staff precautions to minimize potential spreading. Factories and the like need to get back to work ASAP.

The amazing economy we had rolling in Q1 was able to absorb this 4-6 week shut down, but the government does not have the resources to continue floating aid for much longer. Let's all hope Governor Inslee and other leaders around the nation can get this call right. If we crash this economy so hard we enter an actual depression, people will wish they died from virus rather than ride out what there ancestors had to endure from 1929 to 1941. There is no sugar coating a depression. It will make the "great recession" of 2009-2011 seem like a economic boom. This is not a place we ever want to go and certainly we should not trust a government that would deliberately take us there. The people who are suffering under this lock down are the poor and the middle class, the rich are doing just fine so keep that in mind.

Things are still fundamentally sound and smart planning from our leaders can help us recover by the end of the year. For real estate, things are still solid, slow, but steady. Putting people back to work will do wonders for the morale of the nation, will energize the economy, and most likely save lives.

That's my two cents, anyway.