The coronavirus pandemic has change home buying in many ways. Knowing that, for those hoping to become homeowners in 2021 have much to learn. Right now, the competition for homes is intense, with considerably less houses available for purchase than the number of buyers in the market. Getting approved for a mortgage has slowed to a crawl, while mortgage rates continue to plunge to record lows. As household dynamics change, the competition grows more fierce, with many homes going under contract less than a month after hitting the market. In fact, days on the market continue to grow shorter, as homes listed for sale, often have contracts within days. And, given the low inventory for sale, home prices continue to rise.
Has Seasonal Homebuying Become a Relic of the Pre-COVID Era?
In years gone by, spring was the busiest season for homebuying, and yet, last year, with the advent of the coronavirus pandemic, the housing market changed, slowing springtime sales to a low point. Later in 2020, as COVID-19 restrictions were lifted, sales increased, but so did the demand for housing. In fact, a surge in the third quarter of 2020, lead to the highest rate for existing home sales in more than 15 years. The subsequent surge in sales was so great it offset the losses in the spring.
Prospects for the Future of Home Sales
With the COVID-19 vaccine roll out and mortgage rates hovering near or below three percent, continued market growth is projected for 2021. While school schedules have dictated market spikes in the past, the move to virtual school and remote work, coupled with historically low mortgage rates, has spurred potential homebuyers to make the move, further driving demand.
Getting Your Home Search Underway
Like many activities in the age of coronavirus, shopping for homes has moved quickly from onsite viewing to virtual tours. New tools, like video and 3D tours, have evolved to showcase properties, virtually, in the best possible way. Data is still being collected, but preliminary findings show online home shopping has significantly reduced in person visits by potential buyers.
Potential homebuyers should also prepare by securing pre-approval for a mortgage. In the most competitive home buying market, buyers should be prepared with financing in place in the event of a bidding war. Currently, realtors are reporting more than half of all offers are encountering competing bids. In fact, in the mid-level pricing range, there are often multiple offers for every home, which forces prices up and results in bidding wars. In return, home sellers will look at the potential buyers for the one who has the best path to closing the sale, giving buyers who have been pre-approved for a mortgage and advantage over those who have not.
Given the competitiveness of the current market, the ability to compromise also comes into play, particularly regarding what you can afford versus what you want. You’ll want to prepare yourself for the down payment, property taxes, and lender’s fees, as well as the potential for full-price offers, higher deposits, escalation clauses, inspection contingencies, waived appraisals, and more. Many buyers are finding themselves compromising in unique ways to make their offers more attractive.
What to Expect During Underwriting
The underwriting process has changed as well, as the once cumbersome process is streamlined, with completion and electronic signatures, as well as remote notarization. Even appraisals have evolved, with appraisal waivers, and appraisers who rely on drones and virtual applications to examine properties inside and out. Virtual tours not only guide homeowners through the process of showcasing their homes but also ensure images are current and accurate for the listing.
Ready to Call the Space Coast Home?
When you are ready to make your move to the Space Coast, Coastal Home Team is ready to guide you through the process successfully.