Weekly Real Estate Recap 3.29.2020
On Leap Day this year, February 29th, the United States had record unemployment and a strong stock market. Nationally, the housing market was solid and locally in New Orleans, the housing market was stable. Three weeks later, most of the country is sheltering in place and we are experiencing a subsequent economic quarantine. However, real estate is still operating in Louisiana. During the last economic recession in 2007-2013, the banks were not solid, there was an overproduction of housing nationally, and locally, we were repairing damaged homes.
What we know:
- Nationally and locally, foreclosures and evictions are being halted and mortgage companies are offering forbearance if, and only if, you contact your mortgage servicer and make the request. Forbearances were often used post-Katrina; it is a relief tool to delay your mortgage payments for up to 3 months.
- Locally, utility services are not being cancelled due to lack of payment to help homeowners and tenants who are sheltering in place.
- The Clerk of Courts is open from 9:00 am-1:00 pm Monday-Friday and mortgages and cash sales are being recorded. Property can be transferred.
- Banks, lenders, title companies, home inspectors, appraisers, and tradespeople are working within the guidelines of the CDC.
- There has been a 30% loss in the stock market, but home values have not decreased in value in the last month. 50% of Americans do not have funds in the stock market, but 65% of Americans own a home.
- Interest rates are fluctuating but are still at historic lows and the American dollar is strong.
Practicing within CDC guidelines, Witry Collective had inspections, appraisals, and closings this week. However, buyer traffic has slowed down. We can look at past data to help with key indicators to determine growth in our marketplace. In the past, May and October are when the most homes are sold
in New Orleans and I anticipate there will be a delayed Spring buying season that will result in a late Summer/early Fall season (this is unassuming there are no hurricanes that affect us). We have challenges in the short term; hospitality, airlines, local retailers, and oil and gas are all being affected greatly. The hospitality and oil and gas industries make up 40% of New Orleans’ employers. Hopefully, the $2 trillion-dollar stimulus package will help provide some relief to industries that have had sudden shutdown. The long-term effects of this virus are unknown, but we can learn from China and Japan as they move out of their quarantines and we are watching Italy’s recovery.
The fundamentals of supply and demand are still strong, and credit is inexpensive to borrow. A buyer or seller whose employment has been or will be impacted by the virus should put their plans on pause for the time being. Sellers should keep in mind that buyers are always looking and browsing for real estate online has become a favorite American activity. If your home is not on the market, then it is not getting the exposure it should. We have encouraged our sellers to continue getting their homes ready for sale between April 15th and May 15th. In years past, the ideal date to list your home in the Spring market is between March 15th and April 1st.
We had 2 great Zoom calls this week. On Tuesday, Ryan Scafidel, owner of Audubon Title, talked with sellers about real estate closings and how they are being conducted during quarantine. On Thursday, Joe Uzee, VP of Gulf Coast Bank & Trust, talked with buyers about interest rates and the current state of lending. This Friday, the Preservation Resource Center will be conducting a call on real estate in New Orleans. Once I have the context and details of the call, I will share them with you.
In closing, we are continuing to work with industry leaders and housing stakeholders to reflect and make actionable plans to assist people with housing. The value of a home can be measured even more now as our community shelters in place. Stay connected, help your neighbors, this too shall pass.