26 New Orleans CityBusiness
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Real Estate
NEWORLEANSCITYBUSINESS.COM
Real estate market takes precautions amid pandemic ANDREW VALENTI AVALENTI@NOPG.COM
Some property owners looking to sell have gone to certain lengths to protect themselves and others against the spread of coronavirus, or COVID-19. Jourdon Schultz, a commercial real estate agent with Latter & Blum, said he’s seen owners and clients going as far as to spray Lysol on agent’s and buyer’s shoes before entering a property. “We’ve seen owners who are very cautious,” he said. In an effort to combat the outbreak, Schultz said his company has shifted its focus to implementing more virtual tours by using software programs such as Matterport and Kuula 360 that allow a prospective buyer to see a property from a 360-degree view. Schultz said this offering become more prevalent in the past few weeks. “We’ve been really pushing the technology aspect of it really hard,” said Schultz, whose listings include the former Chiba sushi restaurant at 8312 Oak St., multi-family complexes on North Rampart and Tchoupitoulas Streets as well as retail and office properties on St. Claude Avenue.
A recent study conducted by the National Association of Realtors says nearly one in four home sellers nationwide are changing how their property is viewed while it’s on the market due to the viral outbreak. According to the study, the changes include halting open houses, requiring potential buyers to wash their hands or use hand sanitizer, and asking buyers to remove their shoes or wear footies. The percentage of sellers adopting these and other changes has climbed to 44% and 34%, respectively, in Washington state and California, some of the states hit hardest by the pandemic. New Orleans Metropolitan Association of Realtors president Amanda Hanemann said her organization has issued guidelines and suggestions to its members such as stopping broker and public open houses and making sure gatherings are fewer than 10 people. She said NOMAR is not interrupting any of its services or resources it offers to its membership. Hanemann said there are realtors whose clients are in contractual agreements to purchase properties, and if either party can’t meet those obligations with a title company or lender or another entity, they will use a document called a fortuitous event
addendum, which was issued on Thursday. This document, she said, extends the contractual agreement because of any extenuating circumstances. “It’s little things like this to make sure there is no disruption to their business,” Hanemann said. Craig Mirambell, president of Mirambell Realtors, said he expects his agents and sellers to use common sense while at a property such as washing their hands and using hand sanitizer. He said his firm will not be holding open houses or offering broker tours for the time being. Mirambell said his agents and their clients won’t shake hands with the listing agent and will use their eyes to look at the property with minimal touching of surfaces. “If one person wants to show a property and all parties agree to it, then we’ll still show it,” he said. “If a seller is that uncomfortable with showing their house, then I would suggest they just pull it off the market for a month.” Mirambell said his firm has been pushing 3D virtual tours heavily on its social media channels. He said they have been using the technology for the past eight years and likened it to Google Street View, which provides interactive panoramic views from different positions.
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Shaky economy puts buying, refinancing in flux ANDREW VALENTI AVALENTI@NOPG.COM
The stock market continues to tumble amid fears of coronavirus, or COVID-19. The Federal Reserve took dramatic steps to ease panicky markets, promising to pump $1.5 trillion into financial markets and effectively relaunching the 2008-era bond buying program known as quantitative easing, or QE. The Fed also cut its benchmark interest rate by a sizable half-percentage point on March 3 in an effort to support the economy in the face of the spreading pathogen. The entity then cut the interest rate to zero on Sunday, and the QE program will entail $700 billion worth of asset purchases entailing U.S. Treasurys and mortgage-backed securities. Is it time for people to consider a big-ticket item like a house? New Orleans-area finance professionals say it is, but potential buyers don’t appear as ready to agree.
The numbers can be tempting. According to finance company NerdWallet, the average rate on a 30-year fixed mortgage is 3.76% APR as of March 13. That’s roughly a full percentage point less from this time last year. “The January mortgage numbers were up significantly,” said Jefferson Financial Federal Credit Union CEO and University of New Orleans finance professor Mark Rosa, who hosts a weekly radio show on WWL. “It’s a great time to buy a house.” If someone were to buy a $200,000 home, that full-point percentage drop would save the person $2,000 per year on the front end. That number would taper itself down over time, he said, as the balance of the mortgage falls, the amount of interest would fall. Rosa said it may be beneficial for a homeowner to refinance a mortgage, depending on how far away the final payment is. He said a homeowner could also look at taking some equity out and use it for repairs, a vacation or a new car.
Rosa said he hasn’t seen much of an impact yet at JFFCU but expects business to pick up during the spring and summer months when people start looking at buying big-ticket items or refinancing their existing mortgages. Crescent City Community Land Trust executive director Julius Kimbrough said the interest rate drops are “unequivocally” a good thing for people looking to either buy a home or look to refinance their existing property. “The bigger ticket items just got less expensive in terms of financing costs,” he said. Kimbrough said he doesn’t see as many people refinancing their homes, since the interest rates have been on a downward trend the past few years and he thinks some of these homeowners have already refinanced. Kimbrough also cautioned that there are fees one must pay in order to refinance and it’s important to understand what those are upfront.
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He said a person also has to know how long it will take to realize that interest rate savings given the fees. The amount of these charges vary by lender and parish and can include items such as appraisal fees, title fees, origination fees, attorney fees and recording fees. “This is a larger opportunity for new purchasers who are just thinking about getting in the market to buy,” he said. Craig Mirambell, president of Mirambell Realty, said there has been a slowdown of buyers because they want to wait a week or two to see what action the government takes, or what other people are doing. But no clients have said outright they do not want to buy a house if they were already in the market for a property, he said. Mirambell said he’s seen a lot
more people refinancing their mortgages in the past few weeks because of the low interest rates. As for buyers, the interest rates have been so low the past few years he feels people
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have already been scooping up properties, and this rate drop won’t affect that very much. “Most of our clients are getting a 3% rate on a 30-year, and 2.5% on
a 15-year,” Mirambell said. “That’s incredible, but if the rates drop to 2.75%, then is that going to get somebody to buy a house from 3%? No, I don’t think it will.”
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