Judy Chace is the owner and broker of Mott & Chace Sotheby’s International Realty, one of the state’s most recognized specialists in luxury real estate. She spoke to the Providence Business News about how the COVID-19 pandemic has changed the real estate market.
PBN: Is the spring market as critical for luxury sales as it is for family home sales, and how is this spring different?
CHACE: Sometimes the spring market for the second-home, or luxury-home, market is not typically in the season of spring. A lot of times our spring market starts in January. A lot of times, people that buy some of these trophy, coastal properties, they are hedge fund managers, money market managers, and so a lot of times they’ll use their bonuses. They usually get their bonuses in January and they’ll start shopping in January and February.
We’re not as tied to a spring market being spring, summer, fall. And sometimes our spring market is [what] you think of as when everyone starts coming out and looking at properties. In slow years, it starts in July.
PBN: How have sales been impacted by the dramatic fluctuations of the stock market? People’s perceptions of their own wealth has changed.
CHACE: There are a couple of things going on during these incredibly unprecedented times. In one way, absolutely, people are looking at their stock portfolios and they don’t have as much money as they had at one time. So, people do get a little concerned about making very large purchases.
On the flip side of that, what we’re finding, and what I believe is going to happen, is that this COVID-19 quarantine situation has really made people think differently about what they want their future to be.
And as you know, Gov. [Gina M.] Raimondo had asked the New Yorkers to not come to the summer homes. They were flooding here to escape some of the urban areas. What we’re finding is some of our calls for our bigger coastal properties have absolutely ticked up over the last few weeks.
PBN: Are people with means, instead of renting a place for a few months, deciding that a purchase of a second home makes more sense, particularly to decamp from a city?
CHACE: Absolutely. 100 percent. A lot of times people who do not buy second homes, maybe they take their kids to Europe, maybe an African safari the summer after that. I think people are going to be looking a little closer to home, hoping to find a place outside the urban areas and ride out any type of future situation we might find ourselves in in the future.
PBN: It’s like a nesting instinct, but if your life is in the city, you might want another option?
CHACE: What’s starting to happen too is we’re getting acclimated to this virtual kind of business we’re all doing. Our marketing department has completely pivoted to virtual, we’re doing virtual meetings. I think this sort of heavy-handed, brick-and-mortar, people going into an office every day, having to live near where they work, may not be as important going forward as we navigate this new way of living. We’re literally … between New York and Boston. Our coastline rivals anywhere.
PBN: After COVID-19, have the banks behaved differently toward purchases?
CHACE: We haven’t had a lot of problems with banks. The luxury buyer usually has much more of a relationship with their financial person than a first-time homebuyer and such. They have other investments. They have more of an actual relationship. If the bank wants to do the deal, the bank will do the deal. It’s taking a little longer.
Mary MacDonald is a staff writer for the PBN. Contact her at firstname.lastname@example.org.