Fortunately, as restrictions have eased, we’ve seen an uptick in market activity. And economists at REALTOR®.com expect a rebound in July, August, and September, as fears about the pandemic subside, and buyers return to the market with pent-up demand from a lost spring season.
But given safety concerns and the current economic climate, is it prudent to jump back into the real estate market?
Before you decide, it’s important to consider where the housing market is headed, how it could impact your timeline and ability to buy a home, and your own individual needs and circumstances.
WHAT’S AHEAD FOR THE HOUSING MARKET?
Home Values Projected to Remain Stable
Many economists expect home values to remain relatively steady this time around. And so far, that’s been the case. As of mid-May, the median listing price in the U.S. was up 1.4% from the same period last year.
Demand for Homes Will Exceed Available Supply
This supply shortage is expected to prop up home prices, despite recessionary pressures. Fannie Mae and the National Association of REALTORS® predict housing prices will rise slightly this year7, while Zillow expects them to fall between 2-3%.8 Still, that would be a far cry from the double-digit declines that occurred during the last recession.
Government Intervention Will Help Stabilize the Market
The Federal Reserve has also taken measures to help stabilize the housing market, lower borrowing costs, and inject liquidity into the mortgage industry. These steps have led to record-low mortgage rates that should help drive buyer demand and make homeownership more affordable for millions of Americans.
HOW HAS THE REAL ESTATE PROCESS CHANGED?
New Safety Procedures
Government Intervention Will Help Stabilize the Market
For our listings, we’re holding online open houses, offering virtual viewings, and conducting walk-through video tours. We’re also using video chat to qualify interested buyers before we book in-person showings. This enables us to promote your property to a broad audience while limiting physical foot traffic to only serious buyers.
Likewise, our buyer clients can view properties online and take virtual video tours to minimize the number of homes they step inside. Ready to visit a property in person? We can decrease surface contact by asking the seller to turn on all the lights and open doors and cabinets before your scheduled showing.
The majority of our “paperwork” is also digital. In fact, many of the legal and financial documents involved in buying and selling a home went online years ago. You can safely view and eSign contracts from your smartphone or computer.
Longer Timelines and Higher Mortgage Standards
In a recent survey, 67% of Real Estate Agents also reported delays in the closing process. The top reasons were financing and buyer job loss, but appraisals and home inspections are also taking more time due to shifting safety protocol.
Securing a mortgage may take longer, too. With forbearance requests rising, lenders are getting increasingly conservative when it comes to issuing new loans. Many are raising their standards—requiring higher credit scores and larger down payments. Prepare for greater scrutiny, and build in some extra time to shop around.
IS IT THE RIGHT TIME FOR ME TO MAKE A MOVE?
- Why do you want or need to move?
However, if you’re planning a move to be closer to your office, consider whether your commute could change. Some companies are rethinking their office dynamics and may encourage their employees to work remotely on a permanent basis.
- How urgently do you need to complete your move?
However, if your timeline is flexible, you may be well-positioned to score a deal. We’re seeing more highly-incentivized sellers who are willing to negotiate on terms and price. Talk to us about setting up a search so we can keep an eye out for any bargains that pop up. And get pre-qualified for a mortgage now so you’ll be ready to act quickly.
If you’re eager to sell this year, now is the time to begin prepping your home for the market. A second wave of infections is predicted for the winter, which could mean another lockdown.14 If you wait, you might miss your window of opportunity.
- How long do you plan to stay in your new home?
- Can you meet today’s higher standards for securing a mortgage?
- Is your income stable?
WHEN YOU’RE READY TO MOVE—WE’RE READY TO HELP
Your average spring season would be flooded with real estate activity. But right now, only motivated players are out in the market. That means that if you’re looking to buy, you’re in a better position to negotiate a great price. And today’s record-low mortgage rates could give a big boost to your purchasing power. In fact, if you’ve been priced out of the market before, this may be the perfect time to look.
If you’re hoping to sell this year, you’ll have fewer listings to compete against in your neighborhood and price range. But you’ll want to act quickly. Economists expect a surge of eager buyers to enter the market in July—so you should start prepping your home now. And keep in mind, a second wave of coronavirus cases could be coming in this winter. Ask yourself how you will feel if you have to face another lockdown in your current home.
Let’s schedule a free virtual consultation to discuss your individual needs and circumstances. We can help you assess your options and create a plan that makes you feel both comfortable and confident during these unprecedented times.
The above references an opinion and is for informational purposes only. It is not intended to be financial advice. Consult a financial professional for advice regarding your individual needs.
6. Fannie Mae
8. HousingWire predicts
9. Federal Reserve Bank of St. Louis
10. Consumer Financial Protection Bureau