Dear Friends and Neighbors:
With the national emergency of the COVID-19 virus, many people have retreated from any spending plans due to the current uncertainty of how long the pandemic will last, and what will the ramifications be on the economy, both in the short term and the long term.
Much to my surprise of some, real estate activity is still happening! While not at its usual spring frenzy, in just the past week ending March 23, there were 21 new single-family home listings in Newton, and 11 single families had gone under agreement. Houses were continuing to be shown, many virtually, and there were even some open houses that took place, albeit usually with limits of two, four or six people at any one time through a house.
During the 2008 economic crisis, Newton and Brookline markets showed their resiliency. Properties fell by very little in value, and the closer the property was to an MBTA Green Line stop, the less value that the property lost. New construction continued to progress, and there were very few foreclosures in the aftermath in Newton or Brookline. Outside of 128, properties lost value far more precipitously, and there were more foreclosures.
Newton and Brookline, by being close in proximity to Boston, offer the convenience of being close to town, and have many transportation options from the subway system, commuter rail, buses and highways, including the crossroad of two of the busiest interstates in the country, I-90, the Massachusetts Turnpike, and I-95, usually referred to as Route 128 by locals.
With the current crisis, the government responded quickly, as the Fed dropped the prime rate to close to zero. The 10 year bond rate, though, which are often the inverse of mortgage rates, fell precipitously between March 4 and March 9, when it bottomed out at a .54 yield. Meanwhile, the 30 year fixed conforming mortgage fell to around 3%.
A precipitous drop in mortgage rates set off a refinance boom. Rates crept back up above 3% after bottoming out, and have fluctuated wildly in the last week. It is thought that mortgage rates will settle back down to 3% or below once they refinance boom has washed through (or those who might otherwise have refinanced have had other worries and just has not given thought to refinancing when they probably could have or should have).
Both the Commonwealth of Massachusetts as well as local governments, banks and attorneys have all made appropriate provisions for allowing the sale of properties to take place even in this age of personal and social distancing. The required smoke detector and CO detector test, in which a local fire department must come and certify that a property has working smoke detectors, are now being allowed to be put off until after the closing, and after the national emergency has ended, as long as buyers certify that they will get working smoke and CO detectors in place prior to occupying the house. Closings are being allowed to take place electronically in most counties, and there are even provisions being made for remote signings of documents. What is accepted and not accepted is currently very fluid, but be assured that every effort is being made at all levels, from brokers, to attorneys, to local and state government, to create provisions that allow for property sales to take place
So, in closing, while I would not call it an optimal time for one to sell a house, sometimes the right time doesn’t quite present itself when one’s situation does. For buyers, with less competition and limited open houses to create a frenzy, they may not have the upper hand, but they do have some degree of leverage that is not usually found in the early spring market. Buyers should figure that for he houses on the market, the seller has likely considered that it may not be optimal time to sell, but is doing so anyhow, so a seller keeping a house on the market is more likely looking to make a deal than looking to hold out for a deal!
So, bottom line, the real estate market is OPEN FOR BUSINESS. We’ll do what is necessary to keep recommended COVID-19 protocols in place while servicing the clients’ needs.