COVID-19 Realities Become Visible
“As seen in the Real Estate Reality Column in the San Leandro Times & Castro Valley Forum, written by Carl Medford”
While the beginning of the year stated with a bang, the introduction of COVID-19 added wrinkles that have not been fully seen until now. Due to a significant lack of inventory in the local housing market, prices began to escalate in January, 2020 as multiple offers pushed numbers higher. Just when it looked like we were going to see a reversal of the downward trend for 2018 and 2019, the Coronavirus hit and everything changed.
As we all grappled with the new pandemic realities, a few things happened immediately. Some buyers canceled transactions fearing the market would crash. Others lost their down payments due to the plunging stock market and bailed out. On the listing side, some sellers retracted homes from the market due to uncertainty and fear of infection. While occupied homes could not be shown at all, and, in some cases, languished on the market, vacant homes that could be accessed went pending at a steady clip. Clearly, there was a pool of buyers who wanted to buy homes regardless of whether or not we were going through a crisis.
Consequently, the question on everyone’s mind has been, “Will we see an actual effect on the market as a result of COVID-19?” It appears that answer is now, “Yes.” May and June are the months we normally see the highest prices in any given year. So far this year, we are seeing a different pattern. 2020 average prices in San Leandro for single family homes started at $737,000 in January and rose to $775,000 in March before dropping to $741,000 in May. San Lorenzo started the year at $728,000, also climbed to $775,000 before sliding to $740,000 in May. Same period for Hayward began with $740,000, bumped up to $783,000 before settling down to $741,000. Castro Valley emerged stronger than the other three, launching 2020 at $855,000 and aggressively increasing to $949,000 in April before easing to $932,000 last month.
The next question is, “Where do we go from here?” Since no one has been in this situation before, it is extremely hard to say anything for certain. Some have suggested that the normal peak buying season of March to May might be moved out a few months. We simply do not know.
One thing is certain: with no cure and current restrictions, we are still sailing uncharted waters where every day reveals a new real estate reality.
Carl Medford is a licensed Realtor with Keller Williams Realty and a licensed general contractor. This article is sponsored by the Central County Marketing Association.