The Effects of Covid-19 on the Santa Ynez Valley Real Estate Market

This time of year is usually the busiest with real estate in the Santa Ynez Valley.  The hills are green, the weather is starting to warm up and summer vacation is right around the corner.  This year started out like any other.  However, somewhere in the middle of February-beginning of March, the entire market and the Valley in general woke up to a very different economic reality.  The reality of Covid-19 hit.

The once bustling down town of the Valley's tourist center is now like a vacant ghost town.  Many of the businesses have shut and have signs stating that due to the Corona  Virus they will not be open or operating until it is safe for their employees and the public to do so.  

These drastic changes have filtered down into the real estate industry.  The Federal, State and Local laws recently enacted prevented the real estate industry operating at all.  Until the most recent changes to the new laws, realtors were not able to show property, have open houses or conduct meetings with clients, nearly grinding the industry to a halt.  Luckily for us and our clients we have been deemed "essential" to the economic environment and are once again allowed to conduct limited business.  While this doesn't seem important to many, to those who have their homes listed, in escrow or buyers who are in the midst of a purchase, this is extremely crucial to their financial situations.  Many people and industries are affected by the Corona Virus Pandemic, including the real estate industry even in such a small area.

Solvang-Copenhagen Drive at 6:30am.

While we are still experiencing some home sales and new listings, the overall market has gone quiet.  The home prices seem to be maintaining their value, however, the actual activity has slowed to a crawl.   The market seems to be 'holding it's breath'.  Neither going up or down back or forward, just sitting, waiting.  I think, like the rest of us, the real estate market in our area is just waiting to see where we end up.  Due to the uncertain nature of the Virus, no one wants to make a move, all just waiting for the results.  

While the market itself is just waiting, we have seen many homes fall out of escrow due to the Pandemic.  Not due to actual illness, but due to job and economic uncertainty.  Many people have had to cancel their escrow's due to their inability to qualify for their loans, many have lost their jobs or been put on leave which is reflected when a lender checks their income prior to close.  Many people have had loans completely cancel-many loans were pulled from the market place, leaving those who had moved forward with their purchases suddenly without a loan, having to scramble to find another loan entirely or having to walk away from their purchase.  These situations are not rare, but they they are side effects of the panic of over the pandemic.

The new market reality here in our small valley has changed, however we are still humming along.  Unlike many other areas of our nation, we are able to go outside on a walk-while safely maintaining our optimal social distance of at least 6 feet.  Many people in town, while struggling to make life work are keeping their spirits up.  Others are donating their time, money and food to those who are in need during this difficult time.  

A few stats for you:

Gavin Newsom -Governor of California Declared a State of Emergency on March 4th, 2020.

The following stats are for the Santa Ynez Valley.  It is apparent from the current statistical data that our current market is at a standstill-only time will tell how much this pandemic will affect our real estate market and economy.