April 28th, 2020 11:37 AM by Gregg Mower
Ok enough is enough we need to open this economy back up. Despite what people say about the virus it has already played out in California in December January and February. You see every year in California the sun starts to shine more intensely in April and as we move towards summer. It has been widely publicized that the Coronavirus will not survive for long in hot environments. I personally traveled to Australia over the Holidays through the end of December and into January. Upon arrival in Australia I started to feel ill but I was on vacation, so I was not going to let a little cold get the better of my vacation. This mystery cold/virus had me not feeling well with a cough and infected eyes for 2 weeks and by the time we had traveled to the hottest portion of our trip ( Cairns Au.) the illness had subsided. As you know it is Summer in Australia that time of the year so it was warm the whole time. Then a month after I got home in February I got sick again almost the same thing but this hit hard and the cough was more severe and I had a fever and I coughed for a month until it went away the end of February. Then we heard about the virus from China and we were told to shelter in place in March and by that time it had already gone through California. The media neglects to show you a map of the world and how a contagion replicated itself and how it travels the world. If you look at a map you can see that the West coast of the United States, California, Oregon, and Washington would get this virus way before New York would, so it stands to say that California already has developed a herd immunity or it is just too warm for the virus to exist long enough to infect more people. This is not to say it won’t come back and then will we know what to do or do this all over again?
That said, we have to start to believe in in each other again and know that we will get sick and people will die from this virus and many other things that we get ourselves into as a free society. So how do we get the economy going again with people working from home and or laid off and non-necessary business’ that have been closed for so long how do we get it moving? This is going to be tough as the people that have been making money during this have to go out and spend it locally and if they are scared to go out and spend many small business’ will be forced to declare bankruptcy if they have not already. The Travel business: when will people start to trust air travel again, hotels, rental cars, air bnb? There are so many little avenues within the economy that depend on each other, so when you spend your money on travel you are supporting so many others than just the airlines. Restaurants: how are they going to look? Is the government going to make it a law that you must sit so far apart in a restaurant, or have a barrier installed and will consumers want to visit busy restaurants again? If laws are imposed on restaurants to not accommodate as many people, at a time, they will be forced to raise their prices to offset the increased space requirements or shut their doors. Restrictive laws will further inhibit growth and may force many of our favorite restaurants to go out of business. Banking: as you know you can’t go into your bank’s lobby as they are closed. Will they open up the lobby’s again or will they have realized that the consumer has changed they way they can do banking, will we see more virtual banks and less people working in a bank? All of these little things and so many more will play in as the economy opens again.
Do you feel comfortable with your job or your financial situation? That will be the most important question moving forward to open the economy. If you don’t feel comfortable spending, you won’t, and if there are many more people just like you the economy will not open as everyone hopes it will. The United States and capitalism are both all based on consumer spending, without it we have a stagnant economy. On the other hand, is there a pent up demand? Consumers that have been scared of going out now have the green light to move about so they go out in hordes and buy up things at a fevered pace. If that is the case the economy will quickly get back to some sort of normalcy.
Either way the Real Estate and the Mortgage Industry will need time to get back to normal as well. If consumers are tired of the house they have been locked in for the last month and a half they will seek out a new house for their family. If one family that decides to sell their house and buy a new one that will help Realtors, Mortgage Companies, Title Companies, Appraisers, Home inspectors, termite companies, sign companies, credit reporting companies and home improvement stores. So, if people don’t sell and buy after this is over you can see all these industries effected. However, there is another little problem that will arise out of all this and that is employment. The people that have lost their jobs during this crisis will not be able to buy a new home, in most cases, until they have gone back to work or can pay cash for a house. Households may have had one of the two workers laid off and may not have the ability to save for a down payment or may not feel comfortable so they will hold off until they feel comfortable again. Another concern people’s credit may have been hurt by this not allowing them to qualify for a home loan. People that have not made their mortgage payments will not be able to refinance to the low interest that will be there to stimulate the economy when this is over. People that did not make their rent or car payments may not be able to buy a home for 12 months after the crisis.
Not to be a downer but it will take some time to get back to Real Estate as normal. I heard from CAR (California Association of Realtors) that Realtors may not be able to show homes and that virtual tours are going to be the “new normal” of selling homes. This means people will not be able to see the home they are buying in the inside until they can do a walk through at the end of the transaction. This may see the demise of Real Estate transactions at the end from homebuyers seeing the house for the first time and may not like it. This will be interesting to watch unfold as people get more “used to” the new normal.
Let us conclude this with some positive news with the Mortgage industry. Interest Rates are the good news here with them staying down. Although there is still a lot of confusion in the Mortgage industry things are getting done. Now that we have figured out how to work with large companies that have their workers working from home we can navigate through the process as well or better than most in the industry. Here at MAE Capital we are booking new refinances every day. People can apply from their home on their computer or they can download our App and do it from their phone. As far as delivering documents to us you can scan the documents directly from your phone using an App like Cam Scanner. Our experienced Loan Originators can work virtually from anywhere so you will be taken care when you apply for your refinance with us. We look forward to working with you.