With Terry Story, a 31-year veteran with Keller Williams located in Boca Raton, FL
During this week’s Real Estate Roundup, Steve spoke with Terry Story, a 31-year veteran at Keller Williams, about the state of the real estate industry and how agents are being affected during a time when most states are under mandatory quarantine.
The Rules Have Changed
With the majority of the country in quarantine, the rules have changed for the real estate industry. Though agents are considered essential workers, they have to follow different guidelines when helping clients find a home. “We’re not allowed to be in the house with a client when showing it,” Terry said. “The seller can’t be in there either. We’re allowed to show up and let the client in. Only the buyer can be in the home.”
But the majority of agents are taking even further precautions to help prevent potential spreading of the novel coronavirus and maintaining social distancing. “Most agents have created walking tours of homes ahead of time to offer clients. It’s only once they’ve expressed serious interest about the home that we invite them to tour in person. We also have sanitizer, gloves, booties, and other protective elements to help do our part to stop the coronavirus pandemic,” Terry said.
The video walking tours are popular online features anyway. They let agents show potential buyers a home room-by-room without the agent or buyer having to be in a location at a specific time. These virtual tours are especially helpful now and can be made more personal for specific clients. Terry added, “Despite everything that’s going on, homes are still being looked at, bought, and sold. We just have to adapt and keep everyone as safe as possible.”
Prices And Inventory
As can probably be expected, prices and housing inventory are being affected by the coronavirus pandemic as well. Terry said, “Prices are coming down. But as I’ve said before, you tend to get more and more quality offers when you lower the price of a home. However, I have seen some lowball offers. I have a property on the market for $740,000 and there was a $350,000 offer. We know times are hard, however, this is a precedent that we’re not going to set.” “And no one’s at that level of desperation just yet,” Steve added.
But there are a lot of questions. How long will the recession last? How long will people be out of work? What will the economy look like in a few months? Prices could continue to take some hits and inventory is affected also. Terry said, “Right now, we’ve been in a buyer’s market. We’re down to like three months of inventory, which is extremely low. A balanced healthy market is at six months.” Steve pointed out the additional fact that people who are quarantined in their homes aren’t going to be able to sell.
It’s Terry’s hope, however, that potential sellers will take advantage of the opportunity available to them. “With inventory down, now is a great time to sell. There are more people competing for fewer houses, which means more offers. If more sellers think like this, we’ll be able to boost inventory levels.”
Despite what’s happening in the world, it’s still relatively easy to get a mortgage if you’re buying a home, provided you qualify. The only situation where this isn’t quite as true is with jumbo mortgages. “Jumbo mortgages, at least in my market, are mortgages over $510,000. Lenders end up putting deals together and then selling them on the secondary market,” Terry said.
Steve offered some additional info on jumbo mortgages: “A mortgage broker told me that banks, hedge funds, and even some private investors typically buy these mortgages. But many don’t want to get stuck with such long-term mortgages at the low -interest rates being offered with so much uncertainty.”
All of this means that you really need to consider what type of home you want and need and whether you can afford the home without a jumbo loan. If you’re going to need significant financing, it might be better to wait.
If you’d like to learn more about buying or selling a home, check out Keller Williams!
Disclosure: The opinions expressed are those of the interviewee and not necessarily of the radio show. Interviewee is not a representative of the radio show. Investing involves risk and investors should carefully consider their own investment objectives and never rely on any single chart, graph or marketing piece to make decisions. Content provided is intended for informational purposes only, is not a recommendation to buy or sell any securities, and should not be considered tax, legal, investment advice. Please contact your tax, legal, financial professional with questions about your specific needs and circumstances. The information contained herein was obtained from sources believed to be reliable, however their accuracy and completeness cannot be guaranteed. All data are driven from publicly available information and has not been independently verified by the radio show.
Steve Pomeranz: It’s time for Real Estate Roundup. This is the time every single week we get together with noted real estate agent Terry Story. Terry is a 31-year veteran with Keller Williams located in Boca Raton, Florida. Welcome back to the show, Terry.
Terry Story: Thanks for having me.
Steve Pomeranz: Sure. Hey, things have changed since we last spoke. As a matter of fact, we’ve been prerecording a lot of our segments and yet things have been changing so quickly that we’re stopping the pre-recording and we’re going on a week-to-week basis so we can keep up with you. What is going on in your business now that we’re all quarantined?
Terry Story: Sure. Well, we are considered essential, so we can still work. However, working in a different manner. So what’s been mandated down to us is, for example, we can’t be in a house with a buyer. So you say to yourself, okay, so how do you show a house if you can’t be in the house to open it up to show it to a buyer? So basically, what we can do, and we’re doing it really on a lot of the vacant homes, we’ll meet them there, open the door and stand back. We’re not allowed to be in the house at the same time with the client. Nor can a seller be in the house. So virtually the only one in the house is the buyer.
Now we’re taking that a step further. What we’ve done is, a lot of agents have done this, is they’ve videoed their homes before we came into this situation. So for example, if you want a walking tour of the property, we’ve already made them, we’ll send them to you in advance. Not only did we create virtual tours of the homes, we’ve created these virtual walking tours. At that point, if you’re really serious about buying, we’ll bring you into the home. We’ve got sanitizers and masks, gloves, booties, whatever is appropriate based on the condition.
Steve Pomeranz: So what does a walking tour, you’re talking about using an iPad and walking from room to room?
Terry Story: Yeah, basically, that’s exactly what it is. The iPhone walks from room to room as if you were following me, describing everything, opening up cabinets, giving you a real good look at the property. And, it’s interesting, prior to the coronavirus, I’ve sold several homes over the years via FaceTime doing the same exact thing. This past week, I sold a house where the agent went into the house and FaceTimed a client and the client was never in the house.
And to put things into perspective, people think “well, there must be absolutely no business going on,” well, in Palm Beach County, in the last, say from March 31st to April 6th, we had 243 homes go pending, we took on 414 new listings and had 485 closings. Now granted, I know these closings would have generated from business prior to this, but the point is that the business is still moving. The title companies are still operating. We’re still getting appraisers out there. We’re just having to be very careful and cautious and abide by the laws that are given to us.
Steve Pomeranz: The pricing of new of the sale of homes, have prices changed any, is there a softening?
Terry Story: I believe there is. And one of the things and, of course, you don’t get to see it until you’ve got enough data behind you to look behind you and say, “yeah, the prices are coming down.” What I can share with you is that we are seeing price adjustments. Just two of my listings, we reduced them and by reducing them, I got offers on them. And the funny thing is—not even funny, it’s actually more annoying—there’s a lot of bottom feeders, if you will. They’re throwing really, really low offers. I have a property on the market for 740 and we got a 350 offer.
Steve Pomeranz: I see. Well, I don’t think anybody’s at that level of desperation at this moment.
Terry Story: No. Nor do we see that happening. It’s just not the direction that we’re going to go. The housing market is going to take a little bit of a haircut. And you know what, a lot of this is still unknown. Where is the economy three months from now? There are questions. There’s always these, what if, what if? What if? The way that I’m looking at this is the housing market was strong before we came into this.
We’ve had the brakes put on, really the planet, and when we come back out of this, I truly believe there’s pent-up demand on the buyer’s side and pent-up demand on the seller’s side. Buyers still need a roof over their head. Sellers still need to sell. So the real question is going to be, where is the interest rate, which I believe will stay relatively low, and are there going to be more buyers or more sellers? Right now, we’ve been in a buyer’s market, we’re down to like three months of inventory, which is extremely low. A balanced healthy market is at six months.
Steve Pomeranz: Well, we’ve had that issue for years now.
Terry Story: Well, for a long, long time. So quite frankly, I’m optimistic that we may see more sellers come on the market and you say, well, why do you say that? Well, this is the way I’m looking at it. We know that we’re in a recession. Now, how long we stay in a recession, nobody knows. So sellers who’ve been thinking of selling may take this as an opportunity and say, “You know what? We’re at the top of the market. I’m going to go ahead and sell.” So I need a lot more people to think that way because we really need the inventory.
Steve Pomeranz: Yeah. But it’s ironic because if you are quarantined in place, you’re not going to sell, you’re quarantined, and you’ve got to stay in your home. So it’s going to be a delay, otherwise, unless it’s a second home.
Yep. There definitely will be a delay. No question. Yeah.
Steve Pomeranz: Now what about mortgages for the transactions that you’re seeing, are mortgages available easily?
Terry Story: You can still get mortgages, not a problem. What we’re seeing is the jumbos are a little bit harder to come by. So a jumbo in this area is 510,000, so anyone needing financing over 510,000, what happens is the lenders put the deal together and then they sell them to the secondary market.
Steve Pomeranz: Yeah, actually, I spoke with a mortgage broker and he told me that banks are some of the buyers, hedge funds are some of the buyers and private investors, and a lot of them have stepped away from the market now because they don’t really want to get stuck with these long-term mortgages at such low-interest rates in all this uncertainty.
Terry Story: That’s right. That’s right. And so, as a buyer and you’re looking to get a jumbo loan, there is a squeeze on how many places you can actually go to get a jumbo loan, but they’re still out there.
Steve Pomeranz: What was the limit for the jumbo?
Terry Story: In this area, it’s 510. It’s dependent on what state you’re in and where you’re located. But this area, for the most part, it’s like 510.
Steve Pomeranz: Thanks, Terry. Once again, appreciate you spending time with us. Terry is a 31-year veteran with Keller Williams located in Boca Raton, Florida, and she can be found at terrystory.com. Thanks, Terry.
Terry Story: Thanks for having me, Steve.