MIAMI – One of the many industries feeling the impact of the coronavirus pandemic is real estate.
According to Christina Vazquez of The Miami Herald, Jorge Guerra Jr., broker and chairman of the Miami Association of Realtors, said while deals are still closing, they are witnessing disruptions at two ends of the market.
“I don’t see our industry stopping,” said Guerra. “They are setting the tone of what possible can come.”
He has seen some slowdowns and cancellations of high-end sales, but notes much of the workforce at home is causing many to re-think their housing situations.
“Anyone in the service industry and the restaurant industry has been impacted,” he said. “They are scared, insecure of where income is coming (from) and they rather go back with mom and dad, (where it’s) somewhere secure.”
Experts are optimistic about the COVID-19 stimulus package, and some mortgage lenders are offering loan payment deferment programs.
“We have already seen mortgage payments being delayed, evictions being delayed, helping everybody just get through these tough times,” said Guerra. “I don’t think any judge will sign an eviction at this time.”
What happens in the housing market impacts city coffers by way of property taxes, explains Miami City Commissioner Manolo Reyes.
“This year we don’t have that problem because we already collected taxes,” Reyes said. “Next year, it all depends on the effects the virus is going to have.”
Right now, we are in a waiting game. Guerra says Realtors are getting creative, launching virtual home tours to keep the market moving.
“If we get out of this and start normalizing the economy, I don’t expect a major negative effect in home ownership,” Reyes said.
Guerra spoke with Local 10 News’ Christina Vazquez about how the lessons learned from the housing crisis created what he described as a strong financial foundation for our current housing market.
“This market is not like 2008. I just saw a statistic that in the three years prior to the 08’ crash, Americans cashed out $824 Billion in equity from their homes. In the last three years, Americans have only cashed out $232 Billion. 37% of American homes have no mortgage. Of the remaining 63%, 25% of those homes have more than 50 percent equity. Overall, many Americans have equity and won’t have the necessity to sell. For the remaining Americans, the measures being implemented this week should help soften the blow on the remaining sector of the real estate market that is financed.
As for South Florida, we are still seeing strong demand in the Single Family Home market, except for luxury. There is too much pent up demand. While for many this is an unfortunate time, there are many paying high rents looking to take advantage of historically low interest rates. Parties to a transaction are taking precautions because of COVID and realtors are conducting more virtual showings and video call meetings. As title agents who conduct real estate closings, we are still seeing an influx of executed contracts at our office. With Florida now having online notarization, as title agents we are able to conduct the entire transaction online is allowing us to continue conducting business during this period of social distancing entirely online.”