Buyers vs. Sellers ; Corona-virus stalemate?

Question

With tons of Hard Money lenders holding off on loans for the foreseeable future, this leaves a significant amount of cash buyers left in the market. It seems most people that do use HM on their deals, even if their lender is still active, want to hold off for the reason of economic uncertainty.

~60% of the market uses HM, surfacing ~40% of cash heavy investors. With that remaining ~40%, only about half of those are continuing to go after real estate investment properties with corona-virus circulating. Seeing the remaining ~20% being cash heavy, they hold leverage in the buyers market, and seem to be expecting "slam-dunk deals". On the sellers side, trends are showing, sellers are not willing to sell their properties for 50k-100k less just because of this virus. Sellers also don't want to shop around for new houses, when they're being ordered by state officials to shelter-in-place. There seems to be a bit of a stalemate here.

Are you seeing these same trends? What difficulties are you facing when buying or selling investment properties? What are you doing to take advantage of the market?

Let's connect! Share some ideas and experiences that you may be going through in the comments below

Brian Van Pelt · Answer

@Tyler Uliss

With less than 2 months in on the COVID-19 market, its too soon to say there are trends. Right now like in almost every financial and business market what we are seeing in the "slamming on of brakes" There are no 'trends" at the moment other then an almost full stop and most of the closing being contracts already in the pipeline. Right not it's safe to say IF you can sell then sell. Most of my investor buyers have stopped buying and my Seller investors are concerned that they won't get the price they are looking for.

The MLS indicators are fewer home coming on market, Big decreases in house prices are starting to happen as well.The huge indicator is the mortgage origination by lenders is taking a big hit.This is all in the last 3 weeks.

Tyler Uliss · Answer

I appreciate your feedback, Brian! I agree, in just a short amount of time, the R/E market has come to almost a complete halt.

I should have included in the post above-- For the demand side, those buyers are waiting on an answer for what lies ahead, which depends on how quickly the outbreak will be contained. At that time consumers will start spending, and the economic engine will start revving again. That being said, I think the disruption on the supply side could take longer to restore, which could negatively impact everything, particularly if the outbreak is not contained evenly across the world. This would cause a lag from the bounce back in demand. A new reality we are living in, that we must take on/assess one day at a time...