The coronavirus pandemic continues to impact all facets of life, including the real estate industry.
In the first update, we covered policy decisions to halt evictions, lender foreclosures and attempts by the Federal Reserve Bank to keep mortgage rates low.
1. DHS Designates Real Estate as an ‘Essential Service’;
2. Several Counties Defer Property Tax Payments;
3. Manhattan Office Leasing Plunges;
4. Mortgage Rates Drop; and
5. Demand for Virtual Home Showing Skyrocket.
DHS Designates Real Estate as an Essential Service
The Department of Homeland Security (DHS) has designated the real estate industry as an Essential Service during these difficult times, according to Realtor Magazine.
However, real estate professionals are expected to continue to adhere to their state’s executive orders regarding essential essential services. For instance, the State of California banned all home showing effective March 20.
The National Association of Realtor’s (NAR) general counsel explained that real estate professionals must continue to obey local orders on essential services.
“Being deemed an essential service means that you have a special responsibility and opportunity to continue operations if you choose to but not if you don’t,” she said. “It means you have the special responsibility and mandate to adhere to your state’s executive order regarding ‘essential services.’ ”
Here are the real estate professionals considered as providing an essential service:
- Residential and commercial real estate services, including settlement/escrow services.
- Local government staff who perform title search, notary, and recording services in support of mortgage and real estate services and transactions.
- Residential leasing professionals.
- Property management professionals.
- Housing construction workers.
- Local government staff providing support services to housing construction, including permitting and plan review services that can be modified to protect the public health.
Some Counties Allow Deferment of Property Tax Payments
Several counties across the nation are allowing homeowners to either defer payment of their property tax installments to later dates, or waiving late fees for late payments. However, homeowners are advised to check with the county in which their properties are located, as derments are decided by county officials.
Washington State: King, Bellevue, Pierce and Spokane Counties, among others.
California: Most counties have not deferred property tax payments, but are allowing homeowners to apply for late payment penalty abatements.
New York City: Homeowners to defer or reduce property taxes because of “extenuating circumstances.” To qualify, tax payers must have a federal adjusted gross income of $58,399 or less, and own a condominium or a one- to three-unit tax class 1 residential property.
Manhattan Office Leasing Plunges in March
According to Reuters, Manhattan office leasing volume slid to 1.16 million square feet last month from 2.1 million square feet in February.
Requests for Virtual Home Tours Soar by 500 Percent
Redfin, the technology-powered real estate brokerage, saw a 494% increase in requests for agent-led video home tours last week, against the backdrop of the spread of the coronavirus and the cancellation of open homes and physical home tours. As of yesterday, 18.9% of tour requests from Redfin.com were video-chat tour requests, up from 0.2% at the beginning of March, a 94-fold increase.
Mortgage Rates Drop as Demand Weakens
According to the Freddie Mac Weekly Primary Mortgage Market Survey, as of April 2, 2020.
- 30-Year Fixed Mortgage (FRM): Averaged 3.33 percent, down from last week when it averaged 3.50 percent. A year ago at this time, the 30-year FRM averaged 4.08 percent.
- 15-Year Fixed Mortgage: Averaged 2.82 percent, down from last week when it averaged 2.92 percent. A year ago at this time, the 15-year FRM averaged 3.56 percent.
- 5-Year Adjustable-Rate Mortgage (ARM): Averaged 3.40 percent, up from last week when it averaged 3.34 percent. A year ago at this time, the 5-year ARM averaged 3.66 percent.