Real Estate Still Restricted, But 'Opening'

By Dave Fratello | May 1st, 2020

As the weekend hits, it's again a time without open houses.

Yet the market seems to be picking up a little, cautiously.

And our brethren in the Bay Area and the city of Los Angeles are getting some room to run for the first time in a while. For weeks, the Northern California and L.A. real estate business have been operating under extreme restrictions that we haven't had here in MB, even as COVID-19 cases have grown in LA County.

Toughest among those restrictions: No in-person showings or "visits" to occupied properties.

That's right, seller. If you actually live in the house you're selling, no one can see it. If you accept an offer, the buyer can't inspect it. And so on.

No such restrictions ever made it to Manhattan Beach. But boy, was it close.

After LA city imposed its strict limits, LA County approved language on April 10 to amend its public health orders to put our area under the same kinds of restrictions as NorCal and the city. For a few days, it seemed that we local brokers here, too, were going to be blocked from showing and selling occupied homes. We actually had to advise some seller clients who occupy their property (which is normal!) that we wouldn't be allowed to show it. 

Then, no.

The county reinterpreted its own language, and advised the region's brokers that showings would be OK on seller-occupied properties, with certain disclosures and restrictions. Phew.

This week, both NorCal and LA city began to relax showing guidelines, so that policies are becoming more uniform and less restrictive around the state and within our county.

Here's a quick look at the regulations as of now:

Open Houses: No way, no how, nowhere in California.

Showing Vacant Houses: OK, with guidelines. (1) Everyone has to sign a new COVID-19 disclosure (see an excerpt to the right), which warns of the risks, in advance, separately for each property. (2) Buyers seeing a house can be only up to 2 people who already live in the same household. (3) Everyone's got to be wearing masks and gloves, and buyers aren't supposed to touch anything.

Showing Owner-Occupied Houses: OK, with the same guidelines as vacant homes, plus more. We're now instructed that sellers must leave. The seller is advised to take precautions before and after. Note: Technically, in-person showings are supposed to be a fallback when "a virtual viewing is not feasible."

Showing Non-Owner-Occupied or Tenant-Occupied Properties: No go in the city of L.A. Owners cannot exercise lease clauses that would require tenants to leave to allow for showings. Countywide, this is a bit less clear, with guidance that, like owners, tenants "should leave" for showings. (What if they won't? Good question.)

'Virtual' Open Houses and 3D Tours: Technology-based solutions to the difficulty of showing homes have become widespread. Video tours are now vital. 3D tour technology used to be a whiz-bang-neeto kind of thing to add to the marketing of a listing, but for more than a month, it's been de rigueur. Some agents try to make an "event" out of an virtual open house, hosting a live event and streaming it while walking around the house and touting its features.

MLS Rules Changes: The local MLS system blocked "open house" options, so that no one can promote a (prohibited) open house on the system. Then they bent a rule that normally restricts posting a URL in the listing description, so that now it is allowable for agents to promote virtual tours and virtual open houses right in the body of the listing. And restrictions on placing a property in a hidden "hold" status (not visible online, but still actively for sale) were relaxed so that properties could stay on hold longer.

Going back to mid-to-late March, most everyone was too freaked out to want to see property or let buyers in. No one had masks or gloves yet. (Now we carry a box of each in the car to offer to clients at the time of a showing.)

Practices evolved, and in some ways, we've been operating in Manhattan Beach under restrictions like this for a few weeks. There's a lot going on just "below the radar" with off-market or pre-market listings that the public cannot see.

More to the point, in just the last couple of weeks, by observation, local real estate is slowly opening up. We're seeing more buyer interest and activity. Sellers are adjusting to the reality of showing and selling in this market. People are doing what needs to be done to go see homes or to allow buyers in. It seems like more new listings are going live.

Spring wants to get sprung, meaning, you get the feeling that the market wants to work. (Certainly, the realtors do!) People want so much for a version of "normal" to return.

Actual new escrows and sales haven't picked up yet, but those may be lagging indicators.

Everyone would love to know what the actual impact of the COVID-19 situation is going to be on real estate prices and the economy. That's an important but evolving topic that we'll keep coming back to in future posts.


Thinking of selling or buying during these challenging times?

Ask Dave for a quick consultation.

We can talk market outlook, preparation guidelines, mortgage market and off-market options. No obligation.

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