The top headlines at the website of the National Association of Realtors as I write this on March 29 include “Coronovirus Aid, Relief, and Economic Security Act”; “Shelter-in-Place Guidance”; and “Right Tools, Right Now: In light of the challenges presented by COVID-19, and its impact on the real estate industry, NAR is taking steps to support members through these uncertain times.”
Since the first reports of a novel coronavirus at the very end of 2019, the pandemic has spread to become a substantial threat to people in Northern New Mexico, and their enterprises. On March 13, when there were about 10 reported COVID-19 cases in the state, Sotheby’s International Realty broker Tim Van Camp answered a few questions about the impact on local real estate.
Home: How is this changing business?
Tim Van Camp: One of our member’s emails that he and his team have developed said that if you are a buyer’s broker coming to look at one of your listings, there are a series of questions: Has your buyer been traveling? Where have they been traveling? Are they exhibiting any symptoms?
And if you’re going to look at somebody else’s listing, it’s the same thing: Is your seller exhibiting any symptoms?
Home: When we were getting our coffee just now, you said you just lost a million-dollar sale because the buyer is nervous about spending that money with the stock market as uncertain as it is. And you know of other brokers who have had terminations. Is it also because people just don’t want to travel, that they’re hunkering down?
Van Camp: I just know that from the one we’re involved in, the other broker saying that he doesn’t think it’s a wise time to make a significant investment with the uncertainty and instability and volatility of the markets.
I have good clients — you know, clients become friends — who called me on Wednesday. They have friends from out of town who were seeing Santa Fe for the first time and they absolutely loved it. They thought they wanted to look at perhaps a townhome, $600,000 to $1 million, and I set up a tour for yesterday and with the stock market dropping as much as it did, I got a call saying they were headed out of town. They just wanted to get home as quickly as they could. So they canceled the tour.
Home checked back with Van Camp on March 27, when the number of confirmed coronavirus cases in New Mexico had reached 191.
Van Camp: I am closing two transactions this morning. One was under contract since the end of December and one went into contract in early February. Business is still going on but showing activity is way down and showing protocols reflect concerns over the virus.
That day, we contacted three other brokers, asking about the impact on their business. Liz Sheffield, with Keller Williams, at first said she thought it was too soon to tell.
Home: Have you had any deals fall through because of fears about the stock market or traveling?
Sheffield: Well, there are several buyers that are sort of shell-shocked about getting on a plane. But we still have low inventory. I had five things that were under contract and two of them closed this week. We’ve done virtual closings.
Home: You can do that without being face-to-face with the client?
Sheffield: That’s not really unusual for us because a lot of our buyers and sellers are out of state when they close anyway. But one of the buyers was in town and my seller was as well. The title company sent them the paperwork and they made an appointment with Paige Bradley at Santa Fe Title, who makes sure everything is properly signed and notarized, gets copies of their driver’s licenses, takes the paperwork back to them, and records it electronically at the county, and money also transfers electronically.
Home: What is the main challenge, then?
Sheffield: It’s getting the buyers to see the properties, but in 2019, because of low inventory, I had three out-of-state buyers that made offers sight unseen and all three of them closed. We are having closings every day, we’re getting new listings every day, but there are buyers who may be fearful.
Another school of thought is that because we’ve had low inventory and there’s pentup demand, there are buyers that have been looking to buy and can’t find anything. We may have more people wanting to relocate to Santa Fe to get out of the big cities after having kind of a shock with this.
Home next called Liz Cale, president and qualifying broker at Santa Fe Properties.
Liz Cale: We have had people who have traveled here, not from hotspots, who are viewing properties. We have deals that are closing. There are some terminations, but those are typically because people may have lost their jobs. Lenders are checking on the day of closing to verify employment. But contractually, people have a contract, and this is new to everybody. To my knowledge, no one had any inkling about how this was going to impact them.
There’s no provision in contracts before this all hit that people have the ability to terminate over the virus. There is a new form being prepared by the New Mexico Association of Realtors that addresses this situation.
Home: That probably differs in the various states.
Cale: All over the country, it’s different. Our governor did list Realtors as an essential service and I was glad to hear that, because how can you say that lenders and title companies are exempt and essential services and not Realtors? In some states, Realtors are not listed as essential-service providers.
We have a very smart governor. I have a lot of confidence in our local government.
Home: Are you all trying to work from home?
Cale: I can’t, but we have all our staff working remotely to help our brokers. My marketing department can do brochures and our brokers can stop in at any of our offices and make copies of those.
We’ve instigated ACH [“automated clearing house”] for our brokers so funds can be wired to our accounts. We are adapting. We are doing meetings and we conducted trainings yesterday with our new brokers electronically. This is kind of a business that’s very techy anyway, so it’s just forcing us to be more techy than we had planned on being.
Gregg Antonsen, Sotheby’s senior vice president and qualifying broker, said, Here’s what I find to be so interesting: it’s at times like this that you really see people begin to pull together, and you realize how adaptable people can be. We are, like so many offices, having remote, virtual meetings, and some of the humor that is shared also brings people together. The attitude is we’ll all get through this together.
Home: Have many deals fallen through because of the pandemic?
Antonsen: It’s the uncertainty on so many different fronts. We are seeing terminations. Having said that, what’s amazing coming into this, we as a firm, and I think the numbers were up for Santa Fe as well, we are outpacing last year at this time, and our April is looking very promising. It has thrown this big question mark into the mix that hadn’t existed before.
The positive side is that we’re going into this a much healthier economy than in 2008. Then it was a housing-led crisis. This is a virus-led crisis.
Home: It is hard to remember, as that recession got worse, how uncertain we were about the future, especially compared to what we’re thinking right now.
Antonsen: It is hard to remember. It’s this fear of the unknown. The 08 crisis was purely financial. This is about health and we’re not used to that.