The local residential real estate market bounced back quickly from any damage done by the COVID-19 pandemic and associated shutdowns, but commercial properties are still suffering the after-effects.
Allison Van der Veer, brokerage manager and Realtor with Roland Daniel Properties, said her firm lost a lot of business during the state-mandated shelter-in-place order for Georgia residents that lasted most of the month of April, but business since has wiped away concerns about long-term impacts.
“We felt like things started dipping in March, and April was quiet,” said Van der Veer, president of the Golden Isles Association of Realtors. “May started off with a bang, coinciding with the restrictions being lifted.”
For the moment, it seems the shelter-in-place order really just delayed the normal home buying and selling season by about a month, she said. Open houses are still going on, albeit with participants sporting masks and entering homes in limited numbers.
Buyer behavior has not changed much, but many are looking for certain things in new homes due in large part to the outbreak, she said.
“I think the light bulb is going off in a lot of heads — working from home may be a reality in the future,” Van der Veer said. “They’re looking for homes with dedicated offices and room for family and work.”
Some buyers have been looking for a refuge to flee to from highly-populated urban centers, but not so many as to make a notable difference in local versus out-of-town purchases. Her firm is selling about as much as usual to people moving from another location in the Golden Isles.
Most of the issues the industry is now facing are familiar ones.
“Before this started, inventory was pretty tight, and that’s still the case,” Van der Veer said. “For example, in downtown Brunswick, there are normally 20-plus houses on the market south of Gloucester (Street), and for the last six months that number has been 10 or less. A lot of available lots on St. Simons (Island) have been snapped up, and it’s just we need some developers with a dream.”
On the commercial property side, Robert Driggers with Driggers Commercial Group believes a combination of problems with financing and caution in the face of the outbreak are depressing demand.
“The activity level has definitely slowed. We’re getting fewer calls to look at sites or buildings,” Driggers said.
He’s sure some are concerned about expanding during a time when consumers are wary of going out. Another reason is due to the paycheck protection program (PPP), part of the $2 trillion CARES Act approved by the U.S. Congress in March.
“Part of the reason is folks are having more difficulty getting lenders,” Driggers said. “The lenders have been completely covered up with PPP.”
The act was intended to help individuals, healthcare facilities and large and small businesses get through the outbreak. The paycheck protection program, a loan that businesses won’t have to repay if they retain their employees through the outbreak, is a government program designed to accomplish that.
Much the same can be said of builders and prospective commercial tenants, he said.
“People looking to expand are putting those (plans) on hold. Those looking to build are also putting it on hold,” Driggers explained. “(The commercial real estate market) has not died, but it has slowed down.
“I don’t consider this to be a severe situation, I consider this to be a temporary slump.”
Residential rentals are faring better both short and long term, said Kris Maichle, general manager at Hodnett Cooper Vacation Rentals.
“We started to pick up in May, and then it got really busy,” Maichle said.
Vacation rentals were among those targeted by a state business shutdown order intended to slow the spread of COVID-19.
Long-term home and apartment rentals never slowed down, Maichle noted. Short-term rentals did, but took off again after the Memorial Day weekend.
Business is about back to a normal pace, but he said they are seeing more people booking rentals closer to their stay than before.
“We are seeing pent-up demand where you can really tell people have been anxious to travel,” Maichle said. “The bookings were really unexpected for us. We didn’t expect to have so many last-minute.
“Whether we can make up for that shortfall in April, I don’t know. We’re going to need to stay busy into August, which is not typical in our area.”