MB Halts Construction, Real Estate Activity Limited

By Dave Fratello | March 21st, 2020

We're going to collect and share some news here in a moment, but first, a nod to one big change in routine here during the COVID-19 lockdown.

Since February 2008, virtually every weekend, MB Confidential has run a "Weekend Opens" post highlighting new listings open to the public. There are 589 MBC blog posts tagged "open houses."

This week, we won't have such a post. Holding a public open house at this time could be seen as socially irresponsible, not a service.

Late Saturday, our local/regional MLS service, CRMLS, removed "open house" functions from the MLS system, meaning agents cannot use the MLS to promote open houses.

We look forward to the next "Weekend Opens" post, among other regularities of daily life, but a hard rain may fall first before we get to those green shoots.

Construction Banned

In local real estate news, the City of Manhattan Beach on Friday prohibited "non-essential construction activity," effective Saturday, March 21. Sites must be secured and left no later than March 24.

Per the city's press release:

"The City will implement the City Council’s directives under the following guidance:

  • Residential and non-residential construction activity is prohibited for the duration of the State of Local Emergency;
  • Essential maintenance and repair of properties, such as gardening or plumbing leaks, may continue to occur; and
  • Construction projects for critical infrastructure, such as utilities and communications, may also continue to occur."

On this topic, the city appears to mirror LA County. The county's "Safer at Home" order from March 19 (complete text here) specifically allows construction of "essential infrastructure" including "construction of housing (in particular affordable housing or housing for individuals experiencing homelessness)...."

But "non-essential" residential construction is a no-go, and the city has defined that.

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No Showings or 'In Person' Business

The California Association of Realtors has advised that realtors "should cease doing all face-to-face marketing or sales activities, including showings, listing appointments, open houses and property inspections." 

What about non-realtor buyers and sellers?

According to CAR, "Clients and other consumers are also subject to these orders and should not be visiting properties or conducting other business in person."

To the extent that people follow that strict advice, that's a shutdown.

What Real Estate Services Are Permitted in MB?

The LA County "Safer at Home" order does allow for "[p]rofessional services" related to the "permitting, inspection, construction, transfer and recording of ownership, of housing...." This could mean that architects, engineers and community development departments may continue their work, so as to be ready when construction is cleared to begin again.

There's more to real estate than construction or showings. Consider the mechanics of closing a sale and having people move out and in.

The county order specifies that "moving services" are permissible, or "essential," activities.

So because the "professional services" related to "transfer and recording of ownership" continue (realtors, lenders, escrow and title companies), current deals may close and the parties can move.

In addition, "handyman services" along with plumbers, electricians, carpenters and gardeners, are permitted under the county order insofar as they provide "services to maintain the safety, sanitation and essential operation to properties and other Essential Businesses."

A reasonable reading of that limitation is that safety-related repairs are fine, but if you're prepping a property for later marketing, your painters, handymen and stagers may not be free to operate. ("When staging is outlawed, only outlaws will stage.")

State of the Local Market

As to marketing of real estate locally, as of Saturday afternoon, there were a remarkable 24 MLS-listed properties "on hold" in Manhattan Beach, of which 21 switched to a "hold" status within the past 7 days.

Active inventory is 84 listings, but if you add the "shadow" inventory of properties on "hold," we'd actually be at 108.

There are also 51 properties in escrow citywide, according to the MLS. A few deals fell out of escrow this week. Among the more nervous people in town are those involved with pending escrows.

More to say, for sure, about what's up in this market and what's next.

We'll check in regularly as we find new info and data to share.

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