In many ways, we’re living through history right now. Someday, future generations will ask us what it was like to be alive during this time – and though it is, of course, harrowing, and very grave, not everything is being affected by this virus in a negative way: Native animals are returning to places they haven’t been seen in years; the canals in Venice are crystal clear; people are going out of their way to show each other kindness and positivity; and also thanks to Coronavirus, real estate markets are seeing historically low interest rates.
If you’re a buyer…
As you may remember from my brief mortgage explainers, there’s no better time to buy a house with a fixed rate mortgage than when interest rates are this low. It can be easy to doubt yourself during this time: It’s hard to long-term plan when everything seems so up in the air, because the stress of this new landscape is actually forcing your body into fight-or-flight mode.
You should work to override those instincts, though, because if you thought mortgage rates were low before (and they were), that’s nothing compared to where they are now. Mortgage rates are currently around 3.5% – that’s insanely low. If you can lock in that as a fixed rate right now, you’ll be feeling the benefits for years and years to come.
If you want to buy a house anytime soon, you should definitely feel a sense of urgency in wanting to do it now. As a Realtor who has been in the business for many years, it is my gut instinct that these low interest rates are not going to last – and when they do go back up, it’ll be in a big way. After all of the money the fed put into the market to keep us afloat in these difficult times, I believe that when things do open back up again, interest rates will soar. You don’t want to be stuck paying that, even if you do go with an adjustable rate mortgage and it changes after five or so years. Now is the time to move – and truly, low interest rates aren’t the only advantage to buying right now.
Right now, it’s a buyer’s market. Concerned sellers are highly motivated to sell their properties quickly, which means that those buyers who have been courageous enough to buy thus far have been striking some killer deals that would almost never be possible in the normal market. Once lifted, the pent up demand with jump back in with wild abandon, and there will be almost zero inventory, so the bidding wars will begin to wage. If you want to avoid those battles, and strike one of these killer deals, definitely start looking now.
It may not be ideal, or the way you pictured it, buying a home with all these restrictions in place about visits and tours – but I think you’ll find once you start looking, it’s just as fun and exciting as buying a home normally would be, and without all the hassle of having to drive here, there, and everywhere on a day off. I now have many mechanisms in place to make for an excellent social-distancing buying process, including virtual home tours that will make you feel just like you’re walking through your new home! And that’s not to mention that once you decide to start seriously looking at a home, you can do a FaceTime tour directly with the seller – which is something both buyers AND sellers love!
Since March, selling homes has been different, but not impossible. I have found that serious buyers are willing to chat with the sellers and do a FaceTime tour with them and actually liked this process because they get to meet the sellers and ask alot of questions that normally they don’t get to ask. If you were waiting for the perfect time to buy a house, I’d say that time is now!
If you’re a seller…
74% [of Realtors] reported their clients haven’t reduced listing prices to attract buyers, according to a new survey from the National Association of Realtors®. This suggests interested home sellers are remaining calm and avoiding panic selling during the uncertain economic environment brought about by the Coronavirus pandemic.
“Consumers are mostly abiding by stay-in-shelter directives, and it appears the current decline in buyer and seller activity is only temporary, with a majority ready to hit the market in a couple of months,” said NAR Chief Economist Lawrence Yun. “The housing market faced an inventory shortage before the pandemic. Given that there are even fewer new listings during the pandemic, home sellers are taking a calm approach and appear unwilling to lower prices to attract buyers during the temporary disruptions to the economy.”
If you keep your wits about you in the selling process, there is no disadvantage to selling during this time versus any other time – except, of course, on the buying end, when you purchase your next home, as we discussed earlier!
Actually, it was a seller’s market before this crisis – and it’s likely to be one after as well. Before, there was a shortage of homes on the market, and many, many people who wanted to buy had to compete for limited inventory – this is great for sellers, as competition always drive prices up. After this, I have reason to believe it will be the same kind of seller’s market again, as the shortages of available homes has only become more obvious as we go from “coronavirus real estate” back to new normal conditions.
Even now, though it is, as I said, a buyer’s market, sellers still have more power than in a normal buyer’s market, simply because there are so few homes for buyers to choose from. And as soon as this ban is lifted – and nobody knows when that’s going to be – it will become a seller’s market fast. And if you’re in on it right when it starts, you can take advantage much better.
Coronivirus Real Estate is a bit of a different game, and we have to do things a little differently, but that shouldn’t stop you from buying or selling. If you were thinking about doing so, now is one of the best chances you’re going to get – so don’t hesitate to contact me! I’ll be happy to answer any questions you have and assist you in getting into the home of your dreams – I’m confident that you’ll be glad you did!