With all of the change and uncertainty that has come with the onset of the Coronavirus, making a major life decision - such as buying or selling a home - can be extremely daunting. Whether you are looking to downsize, realizing you need more space, or looking for a change of scenery after staying at home for three months, jumping into the housing market during a pandemic may seem like a tall task. We are here to ease some of those worries and help you gain a clear understanding of the market right now!
Based on a year-to-year comparison of the month of May, the market is right on trend compared to 2019. Basically COVID-19 hasn’t halted the marketing in our area one bit. If anything the government’s response to the virus of lowering interest rates has truly amplified the refi marketing… meaning more sellers may be choosing to stay in their homes verses sell because they can lower their payment by sometimes HUNDREDS of dollars a month!
This is great news for sellers – because it puts us in a low inventory market which by economic basics, is a seller’s market! That said, do not be scared to buy a home during this time. Using simple breakdowns of the current market trends, we will walk you through the good, the bad and the ugly of both buying and selling a home in the midst of a pandemic.
Buying a House
THE GOOD: As a result of the economic shut down early this spring, the Federal Reserve cut interests rates. For buyers, this means that mortgage rates have dropped to the lowest in about 50 years. This is a plus for buyers! Mortgage interests’ rates are low, so over time you will be paying less! Although you may be putting in offers higher than you expected, in the long run you’ll be saving!
THE BAD: Currently, there is a low inventory of active listings. Compared to May 2019, active listings have decreased 32.88% to 6,348 total houses for sale. For a buyer, this means less houses to choose from, and more competition with other buyers to present the best offer. This may mean submitting bids to multiple homes and getting out bid.
THE UGLY: Seems like there is a lot of uglies these days… Focusing our attention on buying a house, there are a lot of UNKNOWNS and anxiety. That’s ugly. If you wait too long to buy, interest rates could go up. If inventory stays low, but interests rates go up, buyers will be bidding higher and making a more expensive decision while having to pay more in interest on their long term mortgage. The “what ifs” and hesitation may leave you kicking yourself.
Selling a House
THE GOOD: As previously mentioned, it is a seller’s market! With less houses to compare yours to and more competition, potential buyers have to act fast. This will work to your advantage. It is not unusual these days to receive multiple offers soon after your home goes live on the market. You’ll get to choose from these offers and make sure you are getting the most for your home!
THE BAD: If you are one of our many seller’s that are in the “move up market” (meaning you want to sell one house and buy another) this is a tough spot to be in! Because it’s a seller’s market, buying a home with a home sale contingency is nearly impossible because most likely you would be competing with someone who does not have a home sale contingency. This puts you in a position to have to sell BEFORE you find another home…. which can be stressful, but it is DOABLE! There are ways to make this happen and we are here to help you through it!
THE UGLY: Selling your home means increased foot traffic due to showings, appraisals, and any work that may need to be done. Social distancing guidelines and new regulations for operation may make this anxiety provoking. If you are still occupying your home, having strangers come to take pictures or agents bringing in potential buyers can be nerve-wracking. You will need to be on top of disinfecting, cleaning after any services are done and maybe making sure there is hand sanitizer throughout the house. These are necessary precautions we have all needed to implement in our day-to-day lives, however, it should not deter you from taking advantage of the market!
Bottom line, this market has mixed emotions and challenges on all sides, but it is a GREAT market to be in! If you are interested in making a move but don’t know where to start give us a call!
