buying in the market today

[Brody A.]

I am wondering if the retail market will hold it's value in the first time buyer market.   Should we be looking for deeper discounts?   The problem is in this market motivated sellers and deep discounts have been hard to find   Almost always our sellers are about true margins   So do you sit on the sideline and not work of just face that this market good deals are not plentiful in central Florida 

[Russell Holmes]

@Brody A. I hear from a lot of buyers looking for deep discounts in Central FL/Orlando area, thinking COVID-19 is going to tank prices.  The problem is that data simply isn't showing that, at least not yet. I will say there likely is no harm in waiting a month or three to see what happens, prices aren't going to rise rapidly right now, it's not a 'now or never' moment, but I also do not feel they are headed down significantly either.  At least not here in my market.

 In the area of the market I watch, within 25 miles of Apopka (which encompasses most of Orlando, pretty much Orange/Lake/Seminole counties) and within the last rolling 7 days from right now, there have been 535 new residential listings, 533 residential listings sold, and 695 residential listings to go pending. Only 231 have fallen through to go back on market.  These numbers are from the last 7 days.  I just checked my market inventory report and there are currently 7005 active residential listings.

7005 listings/533 sold per week = 13.14 weeks of inventory, or just about 3 months of inventory. If I do those same numbers based on prices below $500k, it's an even shorter inventory.   This data does not signal an impending crash.  Sales would need to drop way off and/or listings increase dramatically to push prices into a nosedive. Supply MUST far outweigh demand in order for prices to fall.  The Pandemic affects buyers and sellers alike without bias, so if both decrease similarly, supply and demand will stay pretty balanced.  We've had historically low inventory for years, that is not going to go away overnight.

Sales and new listings have been remaining very balanced over the previous weeks. When supply = demand, things are quite balanced and it does not signal a crash.

Going from the Macro picture of the market data to the Micro of what I'm personally seeing in my own business, I closed a sale with investors on 4/15 that went off without a hitch despite socially distant closing, some hoops for us to jump through with buyers signing from out of state, etc. Tenant occupied two unit, tenants staying put, they paid April's rent early, and are still employed, so only ownership of the property changed. I'm working on offering on another property for those same investors now, ready to jump into another. I brought a buyer to a 4/2 listing that we put live about a week before COVID-19 became serious here. Showings slowed a bit, but picked back up and we've been fielding offers. Pre-COVID, I expected to have that under contract in 2 weeks, but it took 45 days. It's under contract for what was discussed as a very reasonable price at the listing, before COVID concerns. No price reductions and no change to opinion of value pre- and post-COVID. My buyer for that house is going to House Hack it. Moving in with 3 roommates who will cover his entire PITI payment. Multiple exit strategies and hedging risk in a major way.

I've got another Realtor preparing an offer on another listing of ours for her buyer.  Expecting that offer today and have had more showings for that property in recent weeks than before. The only big change I've noticed is that I'm getting a lot more direct buyer calls from my for sale signs.  I'd get a few before, but now it seems lots of "DIY" buyers are reaching out to list agents directly to find homes with less contact.  A few I've been able to convert into buyer leads, searching for other properties for them.  But most will bluntly tell me that due to COVID-19, they are calling list agents directly for what they are interested in and won't be employing an outside buyers agent to show anything.  

Sure fear, uncertainty, and many buyers losing employment have disrupted the normal course of business, but people are still selling property and others are still buying property.  None of us can guarantee what the ultimate impact of this is going to be in 3-6 months, but I've been watching the market data closely and I've been in the trenches showing homes, doing virtual tours, listing houses, making offers.  Very simply put, this will not be a 2008.  Prices may soften a little or stay put for a year. It may take longer to get a contract, lenders may be more strict. Rents likely won't increase this year like they did last.  But free-falling prices and low hanging fruit deals sold at pennies on the dollar does not appear to be the reality we are in currently.  We've been on stay at home orders for over a month here, but I've been just as busy with buyers, sellers, and investors as I was 3 months ago. 

Nobody knows the future and an extended shutdown stretching into the summer or fall could have much greater impacts.  For now, I feel the overall market is very similar to before but with most flippers, hard money lenders, and some financed buyers out of the picture.  That is less competition (less demand) for distressed properties, so those may see more reasonable prices and larger drops than the more 'normal' housing inventory.  I'm making more aggressive priced offers, giving more time on inspections, and making some other operational changes to adapt to selling homes during a pandemic, but that's different than expecting wide spread crashing of prices as a whole.