I wanted to take a few minutes today, and speak a little bit about the impact that we're seeing in the real estate market due to the news topic that's on everybody's mind: the outbreak of COVID-19.
Obviously, there's a very big impact to public health and the economy as a whole with regard to how this outbreak is affecting everyone. However, the real estate market is a little bit different, and a little bit disconnected from more "in-the-moment" kinds of activities. Real estate is a notoriously slow-moving industry. The average length of a real estate transaction is about 45 days from contract to close, so that's a long time to even see a deal close, let alone see a major impact to pricing.
Now, our team has had some deals fall out of escrow because of concerns about the impact that this is going to have on the real estate market as a whole. At the time that I'm writing this (March 23), we haven't seen a substantial decrease in prices, nor have we seen a substantial decrease in demand. In fact, we haven't even seen a change in supply from what we might be seeing in a typical spring market environment. I would guess that we're probably having a little bit of dampening from people putting all their properties on the market right now, but from what I'm seeing, people are still selling. People are still calling me up and telling me they have a building that they want to sell for reasons that are unrelated to the current market conditions; it was just the time they were planning on selling--listing in spring of 2020. We still have people that are wanting to buy properties, even with a lot of unknowns here.
Some points that we should be aware of are the potential for rental issues down the road. Obviously, we're all feeling hurt by the economy right now with a lot of people out of work. Many renters in properties that we're selling might not be able to pay rent as they typically would. The government has yet to roll out a rental assistance program that will guarantee rental payments. As such, a lot of landlords are going to be feeling the pressure come April 1st, April 5th, April 6th. We're going to be seeing a lot of landlords who might not be making their bills because of the fact that their tenants aren't paying rent.
The reality is, we don't know what's going to happen. We don't know how big of an impact the COVID-19 outbreak is going to have on the real estate market as a whole. There's a lot of unknowns, and real estate is very slow to react, so we haven't yet seen the full impacts that this will have on the market--but I would expect there to be impacts. It will take weeks, it will take months, it might even take years for us to see the true lasting effects of this event on the real estate market as a whole. For the time being however, real estate is still happening. People are still buying properties, people are still selling properties. Our team closed 4 properties last week alone, and we have a couple more scheduled for the next few weeks. For the time being, the real estate market is still moving. Time will tell how big of an impact this has on the real estate community as a whole, but that's something that I'll be keeping an eye on.
If you have any questions, or you have any thoughts about what the real estate market is doing, or what you're seeing, feel free to drop a comment here. I'd love to engage with you and talk more about this and how this is impacting other people as well.
Stay safe everybody. Wash your hands, and let's get through this.