Commerce in the residential real estates sector in many states across the nation has broken down. Especially hard hit is Los Angeles and NYC.
In NYC deals are falling through and agents struggle to sell over coronavirus measures. Open houses are off the table and some buyers are pulling out of deals.
While the coronavirus continues to spread, parts of California’s real estate industry are grinding to a halt because of Governor Gavin Newsom’s “stay at home” order.
The order went into effect on Thursday, 19 March 2020. The order is in place until further notice. It covers the whole state of California, and it exempts activity as needed to maintain continuity of operation of the federal critical infrastructure sectors, critical government services, schools, childcare, and construction, including housing construction.
Residential developers say they planned to keep building.
“Based on the latest release construction can go on,” said the head of NMS Properties, that has projects in the pipeline in Santa Monica and Westwood.
The Big Q: What about non-housing projects?
The Big A: Construction companies have recently shut down projects due to local directives that non-housing or public works projects are not essential.
Messages left with the Governor’s office Friday were not returned.
The answer will have a significant impact on Los Angeles, as Mayor Eric Garcetti issued an order Thursday night that could curb commercial construction.
Los Angeles construction companies reached Friday stated that they were still reviewing the state and local orders, and did not have announcements yet on company policy going forward.
Also put on the ice is the entire business of buying and selling residential real estate. Governor Newsom’s “stay at home” order essentially shuts it down completely.
The coronavirus has already unleashed havoc on some real estate sectors, and people could only speculate on how much worse it will get.
“I am just sitting at home right now, and working on my book” said a friend in the high end sector of the Los Angeles residential market.
A favorable beginning of Y 2020 for LA’s Top residential brokerages that included record-setting sales has quite come to a halt.
Agents and brokers reached at the weekend acknowledged their business was non-essential, a 180 degree change from comments just 24 hrs earlier in which agents professed deals were being done through private appointments.
The now statewide shutdown had already been taking place in the SF Bay Area, and the result on the ground there is “the suspension of the entire industry,” said a broker for Grubb and Company.
It is impossible to expect home sales to happen with tours done over online streaming, and that public officials are serious about the crackdown on non-necessary travel.
Another issue is that even if a home sale were to close, county recorder offices may not be open to record the deal.
The California Association of Realtors put out a “coronavirus addendum/amendment this week” referring to the global virus pandemic as a “Force Majeure” event that allows closings to be postponed, “as a result of unforeseen circumstances related to COVID-19.”
Have a healthy week, stay home!
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