Reasons why even during COVID this may be the best time to buy or sell a home

Dated: July 20 2020

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Reasons why even during COVID this may be the best time to buy or sell a home

Many people, including realtors are getting misinofrmation from many so called professionals in the real estate genre. But facts are facts. Recently the article I wam citing released reasons to continue to seek out that forever home, be it selling your current home or just venturing out to buy. 

When COVID-19 was showing it’s head, many states chose to enforce quarantine and ban open houses, home selling understandably went dormant for a while. But now that lockdown restrictions are loosening up in some states, home buyers are out with a vengeance—and many of them are eager to make up for lost time. Many states didn’t ban showing homes; savvy realtors found ways to show via facetime, pictures, masking up with gloves asking home-owners to leave doors open and lights on to minimize physical contact (Sweeny, 2020).  

Indeed, the real estate market is already seeing strong signs of a rebound, according to the National Association of Realtors®' Pending Home Sales Index (a forward-looking indicator of home sales based on contract signings). In May, after two months of decline, pending home sales shot up 44.3%—the highest month-over-month jump since 2001, when the index began (Sweeny, 2020). 

Matthew Gardner, chief economist at Windermere Real EstateHe adds that demand is strongest right now in the suburbs and in smaller, cheaper cities—as buyers look to escape the biggest metros and more companies follow tech titans like Google, Amazon, and Microsoft in allowing employees to work remotely for the foreseeable future (Sweeny, 2020).

“If we continue to see an increase in working from home, people can move farther away, where they can get more bang for their buck,” Gardner says. (Sweeny, 2020). 

Yet, amid this surplus of home buyers, the number of homes for sale to actually meet this pent-up demand is at an all-time low.

"There was insufficient supply last year," says Lawrence Yun, chief economist of the NAR. "This year during the pandemic, the shortage has intensified."

According to realtor.com's  housing inventory in June was 27% lower than a year earlier.

And some reasons, most in fact, for the shortage of available homes have little to do with the recent coronavirus crisis. The number of homes for sale is at a “generational low,” says Gardner, because people are living in their homes longer than they used to. In fact, NAR data shows that Americans are spending an average of 13 years in their homes before moving (Sweeny, 2020).

The lower inventory is also the result of fewer distressed properties on the market, “due to the massive government stimulus support, including mortgage forbearance and generous unemployment benefits,” Yun explains (Sweeny 2020). According to NAR , single-family home prices increased in most markets during the first quarter of 2020, with the national median single-family home price increasing 7.7%, to $274,600.

This good news may come as a surprise to sellers, since it was expected that the housing market would take a hit and home prices would drop because of the pandemic. That's quite the contrary. According to Freddie Mac’s July 2 report, average interest rates recently reached a new record low of 3.07% for a 30-year fixed-rate mortgage. Given this means homes could cost potentially tens of thousands less over the lifetime of the loan, it's understandable that mortgage purchase applications have jumped since last year (Sweeny, 2020).

Sweeny, 2020, noted the economy is showing signs of an upswing. Even while the pandemic led to record high unemployment rates in March, these levels have recently fallen slightly, which could be a good sign that people are still eager and able to buy a home.

Continuing spikes in COVID-19 infection rates may have a negative impact on employment numbers in some areas going forward, but for now the national trends are heading in the right direction.

"The pandemic sharply curtailed economic production and consumer spending in March, April, and part of May. As a result, joblessness soared," Hale explains. "But data from May and June suggests that businesses are adding back jobs as consumers get back to spending, and some companies are now scrambling to keep up demand. Some speculated that we'd see a sharp bounce back in activity, and I think it's fair to say that's what we're seeing so far." Stated Sweeny. 

The pandemic caused a drastic change in our society. Telecommuting once again became the new way to work. People have been spending more time at home in general—and this, in turn, has sparked a fresh deluge of home buyers whose current homes no longer seem as comfortable or roomy as they were pre-COVID-19. That is, if your dining table now doubles as your "office," you might be tempted to trade in your short commute for another room or two so all can work from home in peace. People have needs and as usual those needs have changed because life and our social construct has changed. We have been spending more time at home —and this, in turn, has sparked a fresh deluge of home buyers whose current homes no longer seem as comfortable or roomy as they were pre-COVID-19. That is, if your dining table now doubles as your "office," you might be tempted to trade in your short commute for another room or two so all can work from home in peace.

In addition to understanding market conditions, home sellers will want to know that the process from offer to closing may work a little differently today. Courts are taking somewhat longer to process transactions, home inspections are being done differently, nevertheless it is getting done. 

Bottom line is no matter the environment, buying or selling your home is up to you, anytime is the right time when your family needs change. 

Rick & Angie Decker are realtors with Local Homes and Land Real Estate. When life  pushes you into a new chapter we're here to help you enter that chapter. We have years of experience helping others meet their goals and finding their forever home. Give us a call today at 843-499-6872 or email us at rnadeckerteam@gmail.com

Reference

Six reasons why this is actually the best time in years to sell a house. Sweeny, E., July 9, 2020, from realtor.com

Rick & Angie Decker, Realtors
843-499-6872
Email: rnadeckerteam@gmail.com

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Decker Team

Rick and Angie Decker work together as The Decker Team and they specialize in both Commercial and Residential real estate.. Angie entered real estate part time in 2016 while also working as an Operati....

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