The COVID-19 pandemic changed the way real estate transactions occur today. However, it also created some misconceptions about the actual state of the market. Here are some facts to help you separate myths from reality of the true effect of the pandemic on the housing market.
What We Expect from Our Home
TRUE: Since many of us have been assigned to work from home for an undetermined period of time, many people are in the process of reevaluating what they expect from their home and the surrounding community. For many this has resulted in a desire to move up, especially as kids have been home schooled since the beginning of the pandemic. Some are also looking at remote options as employers realized that it might pay
off to have a flexible and remote workforce.
Now is the Worst Time to Sell a Property
MYTH: As Danielle Hale, chief economist at realtor.com, put it:" So far, the data suggests that buyers
outnumber sellers in the housing market”.In other words, we are in a sellers ‘market.
Also, if you list your home for sale now, the odds that you will have lots of competition in your neighborhood is not always true. In fact, fear of coronavirus exposure has pushed some people to keep their homes off the market.
Sale Prices are Plummeting
MYTH: With more buyers on the hunt, home prices are not going to drop significantly. Conversely, it might even at one-point lead to multiple offers. As a reminder, record-low interest rates are driving much of the buyer demand.
Mortgage rates reached an all-time low on July 16, according to Freddie Mac, causing a spike in mortgage applications. Finally dropping below 3% after weeks of speculation, rates settled around 2.87% Lastly, according to the Mortgage Bankers Association Index, there was a 33% increase in mortgage applications
for the first week of July vs. this time last year.
Homes can't be viewed in person
MYTH: Following the “Stay-at-home Mandate, all in-person home showings and open houses were put on hold temporarily in favor of virtual home tours.
Since the initial order, real estate has been recognized as an essential business profession and homes can be viewed in person by appointments only as long as visitors wear masks and a limited number of persons is allowed in the house at the same time etc.
Everyone's Fleeing to Buy Elsewhere
PARTLY TRUE: On one hand, studies show that nationwide listings in the suburbs are drawing more attention these days. In May, the number of views on properties with suburban ZIP codes increased 13%.
Many people eyeballing new locations on real estate websites might not be all that serious about following through. However, when it comes to making an offer on a house and packing up belongings, many may prefer to stay put and see how the coronavirus pandemic shakes out first.
To some extent, the answer to that question will be provided by corporate employers who may or may not encourage remote work from existing and future employees. Facebook, for instance, made such a statement but many local companies have not. Also, people are wary that their salaries and benefits will be reevaluated based on the cost of living where they choose to settle.
To wrap up, long term impact of the pandemic on the housing market is still uncertain but it has certainly not discouraged buyers who are looking to upgrade and that are taking advantage of low rates to snap properties that they may not have been able to afford a few months ago. Hope this helps.
Stay Safe;