Before the coronavirus outbreak hit the state so severely, California housing market was gaining a strong foothold. Home sales and prices posted healthy increases in February due to lower interest rates. Realtor officials warn the robust sales gain in the last few months may not be sustained as the recent financial market turmoil triggered by the coronavirus outbreak will likely have a negative impact on home sales in the coming months.
Mary Kay Groth, president of the Silicon Valley Association of Realtors, said Silicon Valley's housing market had picked up momentum in February. "With interest rates lowered, we were seeing eager buyers and some homes receiving multiple offers. Days on market had dropped in half from January, down to eight days in Santa Clara County and 11 in San Mateo County."
According to the California Association of Realtors, Santa Clara County's February single-family home sales were up 16.7 percent from January and down 1.6 percent from February 2019. In San Mateo County, month-over-month home sales increased 23 percent and were up 2.8 percent from February 2019.
February's median price for a single-family home in Santa Clara County was $1,350,000, 15.4 percent higher than the February 2019 median price of $1,170,000, and up 12.5 percent from the January 2020 median of $1,200,000. San Mateo County's median price in February was $1,575,000, 10.5 percent higher than the February 2019 median of $1,425,000 and 10.7 percent higher than January's median of $1,422,250.
C.A.R. reports statewide, closed escrow sales of single-family homes in February were up 6.6 percent from January and 5.9 percent higher than last year. The statewide median price of $579,770 in February was up 0.8 percent from January's $575,160 median and up 8.5 percent from $534,120 in February 2019.
Now the housing market has come to a pause. Homes for sale have not had the opportunity to be open to the public due to the Shelter in Place orders, said Groth. "The process is pretty much at a standstill. Social distancing is essential. To prevent the spread of the virus, C.A.R. has issued guidance for Realtors to cease all face-to-face marketing or sales activities, including showings, listing appointments, open houses and property inspections."
Realtor officials expect a sales decline as the coronavirus pandemic worsens. "The economic impacts of the coronavirus pandemic are becoming more pronounced as uncertainty continues in the financial markets, consumer spending declines and unemployment insurance claims rise-all factors that impact the housing market," said C.A.R. senior vice president and chief economist Leslie Appleton-Young. "The housing market condition is expected to deteriorate accordingly in the near term, with both sales and prices being downgraded from our original 2020 housing forecast in the coming months."
On Monday, Realtors welcomed news that the Federal Housing Finance Agency had directed Fannie Mae and Freddie Mac to provide alternative flexibilities to satisfy appraisal requirements and employment verification requirements through May 17, 2020. Since interior inspections are not feasible because of COVID-19 concerns, the FHFA has directed the GSEs to use both drive-by appraisals and desktop appraisals in certain circumstances so the mortgage process is not held up due to appraisal issues. Since many businesses have either shut down or are running with skeleton crews as a result of the virus, the GSEs will accept alternative forms of employment verification, like an e-mail from the employer, a recent year-to-date paystub from the borrower, or a bank statement showing a recent payroll deposit.
"Many homebuyers in the middle of a transaction were caught off guard when their transactions were stalled. The FHFA's move will help buyers and lenders continue the homebuying process during this emergency," said Groth.
The Silicon Valley Association of REALTORS® (SILVAR) is a professional trade organization representing over 4,000 REALTORS® and Affiliate members engaged in the real estate business on the Peninsula and in the South Bay. SILVAR promotes the highest ethical standards of real estate practice, serves as an advocate for homeownership and homeowners, and represents the interests of property owners in Silicon Valley.
The term "REALTOR®" is a registered collective membership mark which identifies a real estate professional who is a member of the National Association of REALTORS® and who subscribes to its strict Code of Ethics.
Variations of this article have appeared in local area newspapers.
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