Real estate pivoting: shockingly bad to shockingly good
Real estate is big business in Sussex County. In addition to the generational changes that come with life and death, and the associated buying and selling of properties that are the traditional backbone of the industry, Sussex County is also a retirement and resort mecca. Properties turn over relatively quickly. Some agents have made a career out of selling the same houses many times, whether for rentals, second homes or retirement homes.
No wonder the Sussex County Association of Realtors counts more than 1,500 Realtor members in its ranks. And that doesn’t include dozens more licensed agents in Sussex not affiliated with the association.
But, as strong as the real estate market is in Sussex, how well is the industry doing in this time of coronavirus?
After talking with several real estate people this week with lots of experience in this market, a solid consensus has emerged. In simple terms: When the coronavirus took hold in March, the situation looked shockingly bad. Now, more than two months in, the situation looks shockingly good.
Hear about it in their own words:
Debbie Reed with RE/MAX in Rehoboth Beach: “At first we were in shock. There was not much happening. But the longer people were quarantined, the more time they spent online looking at properties. Now things are pretty active. People want a place to get away to.”
Bill Lingo of Jack Lingo Realtor in Rehoboth: “Through May and the first week of June, in terms of rentals, we’ve been dealing – and will be dealing – with damage control. People changing their minds about coming, wanting their money back. But it’s changing now, with sales and rentals.”
LeeAnn Wilkinson with Berkshire Hathaway HomeServices Gallo in Lewes: “In the first three or four weeks of the virus, when we typically have about 30 or 40 showings on a weekend, it dropped off to about four per weekend. Things looked really bad. Now there don’t seem to be as many rule followers. People are getting out and looking.”
Kathleen Schell with Ocean Atlantic Sotheby’s: “I was really scared about what was happening. In April, pendings were way down. No one could come. The five-year listing average in Sussex is about 3,300. This year that dropped to 2,395. But then things started to change. Now there’s a sense of urgency in the market that I haven’t seen before.”
Bruce Plummer of Coldwell Banker in Lewes: “For a time, the out-of-state travelers couldn’t come, whether they were looking for a rental or to relocate. That definitely impacted sales.”
Andrew Ratner, Berkshire Hathaway HomeServices Gallo in Rehoboth Beach: “”We took a big hit with the rental ban. We were giving money back. Then people were delaying coming, concerned about the virus. But that has subsided now. They’re not as concerned as they were.”
Patricia Anderson, chief executive officer of SCAOR: “There’s a real reduction in inventory. Some have taken listings off the market temporarily, for a multitude of reasons. Some sellers are still living in their homes but are waiting for things to calm down because they’re not sure what things will be like when they do sell. And then, in places like Rehoboth where there are a lot of second homes that people may have been trying to sell, they’re reconsidering based on what’s happening. Some are seeing themselves stuck in the city, and they don’t want to be in that situation again. They want the security of being able to remove themselves if they need, so they might decide to hold on to something they were thinking about selling.”
Now, however, with the economy starting to reopen, fortunes are reversing.
Lingo: “Sales are definitely picking up. For what we’re dealing with, it couldn’t be better. May and June is typically a slower period. Lots of conflicts with Little League, weddings, travel ball. But now, because of this experience, it’s time to buy and they are buying. We’re getting multiple contracts on properties. Even with rentals, people are calling now to make their second deposits. People have cabin fever; they want to get out. As we move more into a comfort zone, business will be hot.”
Ratner: “I’m surprised at how much activity there is. Better than anticipated. For every rental that’s being cancelled, we’re getting three or four inquiries from people who want to come.”
Schell: “People are looking at every new listing and jumping on them. Things are selling very quickly. Right as we speak, I’m dealing with a guy in London who wants to get out. He grew up in this region. He looked at a property online, the contract is being negotiated online and settlement will be online. All online. Others are looking for long-term summer rentals. Two months. People in New York, New Jersey, D.C. It’s like: ‘Two months at $10,000 a week - OK - sign me up.’ They’re not even blinking. People are making faster decisions. Stuff I’ve never seen before.”
Plummer: “Some properties are being sold sight unseen - contingent on inspection at a later date. And I’m noticing that prices are holding fairly steady. Houses are still selling. It’s not all bad.”
Wilkinson: “The last three or four weeks have been super, super busy. Anything that’s priced what I consider to be appropriately has sold quickly. Some with multiple contracts, some for over the asking price. I’m shocked, but happy. I think it’s two things: first, interest rates are so low, and second, people are trying to get to less crowded places - out of the cities. I thought people would put the brakes on but that’s not the case.”
Reed: “Very positive. New Jersey buyers, New York City buyers, now they’re able to come, and they are buying. It’s across the board - new construction and existing. Multiple offers on properties. We’re tickled.”
What’s changed, what’s ahead?
So, what’s happening, what’s changed, and what lies ahead?
Reed: “Agents have had to adapt and pivot, market differently, and they are doing it.”
Schell: “Now that people have been forced to work at home, companies have found they don’t need their people in the office every day. People are working more flexible schedules and finding they can live here and touch base in home offices a couple days a week.”
Plummer: “Real estate agents are creative people. Some have adapted very well and are ready for the new normal. Some still have their heads in the sand, waiting for things to return to normal. But that’s not happening. You have to adapt, and real estate agents are good at that.”
Ratner: “I think things are going to come back more quickly than they did in 2008.”
Lingo: “We’re going to get through this. We’re Americans. We’re resilient and we know how to adapt.”