The house hunt is on: Bay Area real estate market could rebound

NAPA, Calif. - Napa has become the first Bay Area county to relax rules on real estate showings amid cautious optimism for a comeback.

Buyers and agents still have to take precautions and practice social distancing, but house hunts can resume.

"There are people who want to buy and people who want to sell, so this has been a wrench in the gears," said Lee W. Miller, an agent with Napa's Gates Estates Sotheby's Realty and past-president of the Napa Association of Realtors.

The rapid onset of COVID-19 stalled real estate activity poised for a promising spring. 

Sellers stopped listing and shoppers stopped looking. 

Shelter in place orders prohibited entering and viewing for-sale homes. 

But the Bay Area - always a tight market - may bounce back faster than most.    

"We have actually seen multiple-offer situations still," said Miller, noting that inventory was low and demand high before coronavirus hit. 

Now, shoppers with shaky finances are opting out. 

"Either they have been laid off or furloughed or they fear they might be," said Miller, "and that's just good common sense for them."    

Redfin, tracking national numbers, believes real estate fundamentals are healthy.

"The housing market going into this in February was as strong as ever, " said Redfin economist Taylor Marr, "before the pandemic brought everything down in March."

Marr says there are half as many properties on the market, compared to a year ago, but April holds out hope, especially for Northern California. 

"Over the last two weeks demand is starting to come back, " said Marr, "and in the Bay Area we haven't seen demand fall off as much, and that may be because some markets are more resilient to the shelter in place orders."

Miller says most realtors report half their clients have bowed out during the pandemic, and half are hanging tough.

"I was looking at moving into my new home and now I'm not," said Napa social worker Nereida Elena, who searched for five months until she found her first home purchase.   

"We were there, our offer had been accepted, all the inspections had taken place, we were in the home stretch," said Elena. 

Then, amid all the pandemic uncertainty, the plunge no longer felt right, and Elena backed out.

"I do want to give it a little more time and see what's going to happen with the economy, and whether rates continue to drop."

Miller's 33-year-old son was also in the middle of a purchase when the pandemic hit. 

"I figured we need a place to live and I'm not much of a panicker," said Nicholas Miller, who has traded up for a newer, larger home with his wife, paying top dollar. 

"Every area we were looking at, they were actually getting over asking, so we paid over-asking," said Miller. 

During the halt on showings, virtual tours have become an industry lifeline.

Redfin reports one in seven offers are coming from buyers who've never set foot inside the property. 

Napa's re-start is gradual: no brokers tours or weekend open houses are allowed.

Showings are by appointment only with a maximum of two visitors plus an agent.

If the home is occupied, all who enter must wear gloves, masks and shoe-covers, plus sanitize all high-touch surfaces on departure. 

Still, it's a start, and agents hope economists are correct, and that pent-up demand will drive a swift rebound, unlike the housing market collapse more than a decade ago.  

"This time, the real estate market is not a cause of the problem," noted Miller. "It's more a victim, so it's recovery will come much faster." 

Debora Villalon is a reporter for KTVU.  Email Debora at debora.villalon@foxtv.com and follow her on Twitter@DeboraKTVU