Home values high, sales brisk, supply limited during pandemic

EL CENTRO — As the COVID-19 related shutdown in Imperial County enters into its sixth month, homes are still being sold at a good clip, while loans for businesses are at a standstill.

However, many current homeowners who are surviving right now with forbearances to their mortgages may not be able to survive much longer, said George Nava, of Nava Commercial Capital and Real Estate in Brawley.

As the home forbearances end and the deferred payments come due, the people still waiting to return to work will find themselves in a bind.

If COVID-related closures remain in effect for a few more months, Nava said he thinks the county will have a lot of foreclosed homes on the market in 12 to 18 months.

“At some point the forbearance runs out, and you have to pay up,” Nava said. “You still have to be able to make the payment.”

Imperial County Realtors Association President James Garcia said he thinks the potential for homes going into foreclosure is there, but he is hopeful the government will step in to provide some help.

However, as of right now, residents who have jobs are still purchasing property, and due to limited housing availability, houses usually sell quickly.

Garcia said the shortage of homes in the county often result in multiple offers on houses.

Michelle Hollinger, vice president of Victoria Homes (a home builder) in Imperial, told the Imperial County Board of Supervisors Tuesday how home builders are suffering.

“Home sales will be stagnant and more jobs will be lost,” Hollinger said, adding home builders understand they must proceed with safety orders in place.

In the first few months of the pandemic and the governor’s stayat-home order, there was a significant decrease in home real estate transactions, Nava and Garcia said.

However the market rebounded in June and July to the point that the market is only down 5 percent from the same time last year.

“It’s a real COVID effect,” Nava said. “If someone does list and (the home) is priced fairly, it sells quickly.”

Two reasons homes are still selling is the low interest rates and a shortage of inventory. Many homeowners, some who have lost their jobs, have nowhere to go if they sold their house.

People are now seeking loans to upgrade their homes rather than selling them, Nava said.

In the first 90 days of the pandemic, it was very difficult for residents to secure a loan, but that also eased up in June, he said.

But commercial lending has ground to a halt with businesses remaining closed so long and prospective business ventures facing similar uncertainty.

“Even if they are looking to finance, it is really challenging,” Nava said.

He explained a restaurant that can only do curbside or delivery service is not back to where they have to be to survive, so a loan under those instances isn’t available.

Real estate agents have had to adapt as well. There are no open houses, and all showings have to be done by appointment. All the necessary precautions like face coverings and social distancing have to be followed, too.

“It’s not impossible, but it’s a challenge,” Nava said. “You have to adjust to the new normal.”

Valentina Estes with Benchmark Mortgage, said their employees were ready to work from home when the stay-athome order came.

She said everyone keeps in contact with clients by phone, and the low interest rates on homes is the primary reason the market is not suffering.

Johanna Caballero with Fairway Mortgage said their business has doubled in home loans due to the low interest rates.

She also said there are not enough homes on the market, as people are hesitant to sell their homes, and the shortage drives up prices. too.

While every lender and person has different circumstances, Caballero thinks homeowners should use the threemonth forbearance as the last resort.

“If the person can make the mortgage they should,” she said, adding taking one out puts them at a disadvantage when paying it back.

Garcia agreed, saying when a homeowner considers using a forbearance it should be clearly explained on the advantages and disadvantages.

Garcia said while the home value market is very strong, there have been fewer homes sold this year because of the coronavirus.

He said the market started off strong at the beginning of the year, but when the pandemic hit, everything shut down for two weeks because no one knew what to do.