Real Estate Market during corona
Advice for Buyers & Sellers
There are clear signs that pockets of the U.S. housing market continue to heat up, and Cache Valley is no different. With experts estimating a 35% increase in time spent at home due to the pandemic, people have become more aware of shortcomings in their current space. This is motivating many to move for amenities like a home office and bigger backyard.
Knowing the current outlook of the real estate market will help you be prepared as you
navigate your way to a successful real estate transaction.
So what can you expect if a home sell or purchase is in your near future?
INCREASE IN HOME SHOWINGS
home showings are way up!
DECREASE IN HOMES FOR SALE
Demand is up… but the number
of homes available is way down.
AVERAGE EXISTING SALES PRICE UP
Soaring sales prices are the consequence
of high demand and low inventory.
TIME SPENT ON MARKET
spent on market drops to a 21-day average.
NATIONWIDE DATA PROVIDED BY THE NATIONAL ASSOCIATION OF REALTORS®
Everything we do and how we live looks much different now compared to 8 months ago. Living through the coronavirus pandemic has changed the way we work, how our kids receive their education… even how we spend out time outdoors. Entire industries have been forced to rethink their business models to weather the storm, and hopefully rebound after the pandemic eases.
Real Estate is one of those industries to watch and every market is different. Staying up-to-date on your local real estate market with help you determine if making a move is the right move, the challenges you’ll face and how to successful navigate a real estate market during coronavirus.
From pre-approval to making your best offer or preparing your home to list, we breakdown the pros & cons to buying & selling during the pandemic. In addition, reach out to your favorite, and trusted, real estate advisor. Discuss with them your needs, wants and current market conditions to find out if now is the right time to make the big move.
See below as we breakdown pros & cons for both buyers & sellers.
Cost isn’t the only challenge facing home buyers in 2020. In Cache Valley, home prices are accelerating, largely due to the lack of available homes on the market. New listings are down 15% over 2019, resulting in fewer properties to choose from and bidding wars for desirable properties. These challenges drive up home prices. Here locally, 3rd quarter 2020 saw an increase in the median sales price, up nearly 9.62% to $285,000 from $260,000 just last year.
There's good news too!
Due to coronavirus, mortgage rates have plummeted. In fact, with every 0.125% drop in interest rates, your buying power increases. Ultralow rates can potentially shave more than a hundred dollars off a monthly mortgage payment and tens of thousands of dollars over the life a loan. This means many prospective homebuyers can likely afford more home than they thought.
Early on in a typical 30-year mortgage, more than 95% of a buyer’s monthly payment goes toward interest. The lower the mortgage rate, the lower the amount of interest that needs to be paid. And the lower the monthly payment, the more affordable the home is on a month-to-month basis.
Tips for BUYING During a Pandemic...
- Pick a REALTOR®. Hire someone you trust with a proven record. Someone who knows the market, is proactive, and available 24/7 because…
- Speed Matters. Well maintained and desireable homes have been priced appropriately and will go fast. If you like a property, be prepared with an offer. A seller won’t wait long, especially if there are other interested buyers.
- Get Pre-Approved. Find a lender who will go over your finances and pre-approve you for the appropriate loan.
- Decide How Much You’ll Spend. Once pre-approved, you’ll be able to determine a comfortable monthly payment, how much you’re prepared to put down. This will help you move quickly when you find a home you love.
- Expect Competition. The market is competative and the supply of homes is limited. Multiple offers are common.
- Patience Pays Off. Homes that have been lingering on the market can present excellent buying opportunities. Sellers are more likely to negotiate on price, especially if they’ve already bought another house and are paying two mortgages. Additionally, you will potentially have more options if you don’t rush into a purchase. Many sellers pulled their homes off the market in March and April when the pandemic precipitated strict stay-at-home orders. Over the next few months, a number of sellers will likely relist their properties.
We’re sitting in an optimal moment in time for homeowners who are ready to sell their houses and make a move this year. Today’s homeowners are, on average, staying in their homes longer than they used to, and this is one factor driving increased homeowner equity. When equity grows, selling a house becomes increasingly desirable. Increasing equity is enabling many homeowners who are ready to sell their current houses today to sell for an increased profit, and then reinvest their earnings in a new home.
But wait. Prepare yourself.
Selling in a seller’s market comes with it’s own set of challenges. Expect competition and possible multiple offers if your home is well-maintained, priced right and in a desireable area. The byproduct being that you’ll fetch a higher price for your home. However, appraisers locally in Cache Valley report a lack of comparable sales to choose from when completing their valuation. This may result in either your buyer bringing additional funds to closing OR having to renegotiate the purchase price.
Where do you plan to go? Many potential sellers report that while they are anxious to sell, they haven’t found another home that meets their desired wants and needs. Lack of inventory strikes again.
Tips for SELLING During a Pandemic...
- Pick a REALTOR®. A reputable, local REALTOR® will help you prepare and sell your home during the pandemic. They’re aware of local government restrictions/mandates regarding coronavirus, and have made adjustments to maintain a clean & healthy environment inside your home.
- Staging. First impressions count for a lot. If a potential buyer is distracted by clutter or over-decorating, they may not see the features that made you first fall in love with this home. Clear out unnecessary items to give your home a clean, open feeling that will wow buyers.
- Property Photos. In the midst of a pandemic, many buyers are placing offers site unseen, relying solely on online photos and virtual tours. Professional photos are worth the added expense and will help and will make your home stand out among others online.
- Expect Serious Buyers. Well maintained and desireable homes that have been priced appropriately and will go fast. Many buyers have already put an offer on a property, and lost in a bidding war. Because of this, buyers are serious and have already been pre-approved for a mortgage and know how much they are willing to spend.
- Push for a standard closing, but expect delays. Low interest rates have spurred an increase in home refinances. Lenders are back logged and the average time to close on a new mortgage takes time. Expect 4-6 weeks, but don’t be surprised if your buyer needs more time for inspections, appraisal or settlement.
Buying & Selling is Still Possible…
Even during a Pandemic.
Contact a REALTOR® today to get started.