How Does COVID-19 Affect the Real Estate Market in Wisconsin?
Although there continues to be a shortage of residential properties in Wisconsin as it relates to demand, despite the Coronavirus Pandemic – there are several things that are emerging in the real estate market to be aware of related to foreclosures, pending sales, residential property showings, record low interest rates and the ability to have documents notarized remotely.
Federal Government Suspends Foreclosures and Evictions on Federally Backed Mortgages and Offers Disaster Financing to Small Businesses and Non-Profits. On March 18, 2020, the Department of Housing and Urban Development suspended foreclosures and evictions for mortgages insured by the Federal Housing Administration (HUD) until the end of April, a move that will affect about 8.1 million mortgages.
The Federal Housing Finance Agency also ordered Fannie Mae and Freddie Mac, the companies behind about half of the nation’s $11 trillion mortgage market, to suspend foreclosures and evictions for any single-family mortgages they back for “at least 60 days.” If you are not sure if these orders impact your mortgage, contact your mortgage lender or mortgage servicer. This may be a substantial source of relief to many Americans.
In addition, the Small Business Administration (SBA) also ordered disaster financing for America’s small businesses. As part of its disaster assistance program, the SBA is providing low-interest working capital loans of up to $2 million to small businesses and nonprofits affected by the coronavirus.
These loans carry an interest rate of 3.75% for small businesses and 2.75% for nonprofits. Loan repayment terms vary by applicant, up to a maximum of 30 years.
The Wisconsin Realtor’s Association came out with a new Addendum for use with the Offer to Purchase. This form will allow buyers and sellers of real estate to address the potential delays that may emerge with the closing of offices or the suspension of services (lenders, title companies, register of deeds offices, etc.). Moreover, the ability to access, inspect or test properties as part of standard pre-closing procedures may be altered or changed, due to the current medical crisis. The use of the WRA Coronavirus Addendum may be critical to residential and commercial transactions in order to preserve the of the contract for buyers and sellers of real estate in Wisconsin.
The Greater Milwaukee of Realtor’s Association issued, last week, a reminder notice to their members who may be showing properties to be careful to limit the exposure to Coronavirus. To help keep buyers, sellers and agents safe during this medical crisis, agents and their buyers may want to consider wearing medical gloves during showings. Also use an hand sanitize before and after leaving a property. Similarly, homeowners who have their home listed are encouraged, to have hand sanitize near the entrance of the home for any prospective buyers and their agents to use on their way in and out of the home. These practices would apply to commercial or industrial properties as well. It is not unlikely that we will see a point in the not too distant future that showings of apartment buildings, condominiums and eventually individual stand-alone structures such as single family homes, commercial, retail or industrial property may be limited or prohibited.
Currently the low interest rates which we have reached record lows during the recent months have just got up during the last 10 days. Rates are still historically low, but they have gone up with the market uncertainty, despite the recent actions by the Federal Reserve. Buyers and Sellers need to be cognizant of these market trends because it will impact the ability for buyers to afford the homes and businesses that they are seeking to buy.
Effectively immediately Wisconsin Stats. § 140.145 will allow for remote notarization by qualified notaries, title companies, financial institutions, attorneys and other real estate closing agents. We have several attorneys who are registered to assist with remote notarization or closing services.