Real Estate In The Time of Coronavirus: SPECIAL REPORT. New York On PAUSE Will End May 15th! What Does That Mean For The Local Real Estate Market?

​The number of days that have passed since the beginning of the New York on PAUSE (March 23, 2020)

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This is a special report. Extra! Extra! Read all about it!

Yesterday Governor Cuomo announced the New York on PAUSE executive order will be allowed to expire on May 15th setting the stage for the economy to open on a region-by-region basis across New York State. I have captured the most salient slides from the Governor’s presentation as it applies to our real estate market. See the slides and my analysis below.

As always, I am available to talk privately with you about your particular real estate situation. Call, text or FaceTime: 585-732-1767. ​Email: romecelli@realtor.com

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• First, the Governor revealed the New York on PAUSE executive order that shut down the state on March 23rd will end on May 15th.
• Second, he laid out the preconditions to reopening the economy.
• ​Regions will have to meet seven basic requirements before they can begin to reopen.​
  
• Health and safety were above all other considerations. 

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• Next the Governor described how business sectors would be ranked based on their relative risks and rewards.
• Real estate was placed in “Phase 2” following construction & manufacturing.

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• The Rochester-Finger Lakes Region was identified as a LOWER RISK AREA and among the BEST PREPARED FOR REOPENING with 5 of the required 7 benchmarks already in place.
• In order to reach Phase 2 the number of people testing positive for COVID-19 and the number of people admitted to the hospital, among other requirements, will have to remain below the established standards.​

CLICK HERE TO READ THE DEMOCRAT AND CHRONICLE ARTICLE.

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What does all this mean for the local real estate market?

I expect the local area to be ready to enter Phase 1 of the reopening on or not long after May 15th. It will take 2-3 weeks after Phase 1 has been implemented to see if the rate of infections and the rate of hospitalizations remain low.

I am optimistic our area will advance to Phase 2 in mid June, if not before. When our area is approved for Phase 2 the real estate sector will be allowed to reopen in steps as determined by a local consortium of business, health and government leaders.

While it's not clear what reopening the real estate market will look like at that point I believe, at minimum, real estate agents will officially be allowed to enter occupied properties in person, alone and with the informed consent of the property owner. I strongly suspect a limited number of office staff will be allowed to enter professional offices so long as everyone wears PPE and maintains social distancing.

The decision to allow real estate agents to enter properties will result in a significant boost. It will allow agents to see properties first hand and offer opinions to buyers and sellers. It will allow agents - rather than home sellers - to broadcast (FaceTime, Zoom, etc.) tours as well as perform simple tasks such as preparing a home to be shown and securing the property down after an appointment.

At this point, in my humble opinion, the real estate market will be able to operate at 70% or higher effectiveness.

What’s missing? What’s next?

Some members of the public and some real estate agents will not feel comfortable engaging in real estate related activities until safe treatments are widely available and/or a cure is found. Some sellers will remain unwilling to allow agents and/or buyers to enter their property except under very limited circumstances. Video conference tours, interactive virtual tours, pre-recorded video tours, etc. will remain essential during the reopening process and through the end of the year at least. Until the risk of infection is significantly reduced and everyone feels comfortable many buyers will submit offers to purchase property never having set foot inside but conditioned on a walkthrough immediately after acceptance of their offer. Complicated. Not ideal. Necessary.

Then what?

If the rate of infections and hospitalizations remains low, then by Labor Day I expect real estate agents to be able to meet clients and members of the public in person in very small numbers with everyone using PPE and maintaining social distancing. When real estate agents are allowed to meet their clients and members of the public in person it will restore nearly all the functionality necessary for an fully effective real estate market. My guess: the market will operate at 90% or more of normal effectiveness at that point.

All this will be met with celebration until the anticipated second wave of COVID-19 hits in the fall; probably after the election in November. Hopefully, by then we’ll have found effective treatments if not a outright cure. Since that scenario is unlikely I expect we’ll enter 2021 under a pall of uncertainty over COVID and the economy. It’s going to be a rough ride.

In the meantime.

Of course, I could be wrong but I expect the real estate market (agents, buyers and sellers) will continue to push hard against the current rules under NY on PAUSE. As a practical matter by the time we enter Phase 2 most real estate practitioners will already be operating as though we’ve been in Phase 2 for weeks. Momentum will be nearly overwhelming to enter the next step: meeting clients & members of the public in person. 

What should you do?

Get ready to make hay while the sun shines. If you have the intent to purchase or sell property in the foreseeable future, the time to wait is over. You’re going to want to get ready to act now.

More on this in my next post.