This past Valentine’s Day, seemingly an eternity ago, the rental market was picking up, and sales activity was steadily progressing. Customers who had taken time off of their home search during the winter were coming back to buy a house to be in residence for the summer.
This changed in the first week of March, when customers began calling for rentals for immediate occupancy through the end of April. Some had pulled their kids out of school early and were planning to rent for a year, while others wanted to rent what was left of March through June. Soon, the inquiries snowballed and every day was like “Groundhog Day”, starting with coffee and the news, and the next 12-14 hours spent talking on the phone with customers and landlords, which has continued. I estimate that I have had over 150 phone calls since the beginning of March.
Last autumn, many Landlords priced their 2019 winter-2020 early spring rentals while others had never given a fleeting thought to March, April or the beginning of May. After the onslaught of rental inquiries started, in many cases within minutes of confirming prices and availability, some Landlords increased their prices, saying other real estate agents urged them to. Other Landlords who had been similarly approached, said they would honor the pricing they had quoted. A customer likened this to “the guy on Amazon gouging prices for hand sanitizer.” Overall, the rental rates for the months spanning March through June were inconsistent between similar houses in the market.
There are other concerns for Landlords, including the possibility of renting to a tenant who falls ill and cannot move out at the end of the lease term and/or is unable to pay rent because of extenuating circumstances, such as loss of employment. In July 2019, the NYS Housing Stability and Tenant Protection Act of 2019 was passed, where, among other vast changes, the equivalent of one month’s rent is the maximum that can be collected in advance of move in. And a few weeks ago, NY State indefinitely suspended residential and commercial eviction proceedings amid the novel Coronavirus outbreak. Very often, homeowners list their houses for sale while also renting, which may present challenges if the tenant is ill or does not want to allow access to show the home for sale.
Although the US Dept of Homeland Security has classified real estate as an essential business, NY State which holds our licenses, has deemed it a non-essential business, and issued a “stay at home” mandate which applies to all real estate agents. The NY State Association of Realtors (NYSAR), which is our thread of communication to Albany, sends updates on how licensed real estate professionals can practice during this time, which include compliance with the following:
–limit in-person contact with visitors, customers, co-workers, other licensed real estate agents and real estate related vendors, and clientele. According to NYSAR, “The Governor’s statement can only be interpreted to mean that real estate related activities such as in-person showings, open houses and in-person listing presentations are not an essential function or service…There are no exceptions or loopholes. You are not precluded from most work that you can accomplish from your home but you are prohibited from any in-person contact with clients/customers and other licensees.”
–suspend showings of homes for rent and for sale, including “unaccompanied” showings. In the case of the latter, until the mandate, I had been making my listings available for a customer or a cooperating broker, standing in a distance, sometimes outside, with the cooperating broker. According to NYSAR, “The Governor’s mandate is to prevent person to person contact. The listing agent should not permit showings where a licensee will be accompanying members of the general public. If the listing agent is permitting such showings, they may be liable as well. Penalties can range from a fine of $2,000, being charged with a misdemeanor, and possible license suspension or revocation.”
Affected real estate activities include:
–appraisals which, depending on the bank involved, are being conducted without an interior inspection;
–home inspections, classified as non-essential, have been put on hold;
–final walk-through prior to closing. Two upcoming closings are being done without a final walk through by the buyers since no one can accompany the buyers;
–closings are being done remotely, with most paperwork being signed electronically or mailed to attorneys, with the title company being the main point of contact;
–leases are being transacted electronically on a sight-unseen basis, with keys being left for the tenant to pick up.
NYSAR is seeking guidance from NY State as to whether virtual tours, eg video, Facetime etc. can be done by real estate agents, because it is not known whether being inside a dwelling can pose a health risk to an occupant after the real estate agent leaves the home.
Despite protocols set by NY State, as recently as this week there are still real estate agents who continue to show houses, meet clients and customers, sometimes contacting other agents’ clients directly to gain access to listings.
This is an unprecedented time for us all. There is only one other time in recent memory that felt similar, after 9-11. Back then, I felt that something extraordinary had occurred that none of us had any control over that affected each and every one of us; It was an event that lead me down different, unplanned paths in my life. During that time, I saw both the dark side of personalities in some and in other people, the greatest demonstrations of humanity and caring. We have some heroic neighbors on Shelter Island working in health care, saving lives every day, and other literally awesome people reaching out to those who may need assistance. We are all in this together and will pull through by taking responsibility for our actions and helping one another.