In general, the busiest time for buying and selling real estate is in the spring, but 2020 is the exception. With the COVID-19 outbreak came shelter in place orders, which meant most buyers and sellers put a hold on their plans. As a result, new listings and sales across the country fell.
Now that reopening phases have begun, and restrictions are being lifted, the market seems to be bouncing back. But given new coronavirus spikes, though spotty, along with safety concerns, the economic downturn, and civil unrest, many are left wondering if now is a good time to buy or sell real estate. Before making your decision, let’s look at the future of the real estate market, as well as your timeline, needs, budget, credit, and overall circumstances.
The Future of the Housing Market
The coronavirus pandemic has left its mark on the economy – locally, nationally, and globally. Unemployment has risen to new highs, economic pundits are predicting a coming recession, and yet people continue to need housing. The good news is the same economists who are predicting a recession are also projecting that home values will remain steady. In fact, along the Space Coast in the second quarter of 2020, median sale prices for single family homes rose 5.7% over the second quarter of 2019.
In addition, affordable homes have been in short supply for several years, and the COVID-19 outbreak further limited that supply. This means, of course, that the demand for homes will continue to exceed the available supply. In and around Brevard County, available inventory of residential homes has decreased by 27.6% in the second quarter of 2020 over the same time last year. For homeowners, this could mean an increase in home prices even in a pre-recession atmosphere.
To prevent excessive foreclosures and market instability, lawmakers intervened quickly passing The Coronavirus Aid, Relief, and Economic Security (CARES) Act providing “government-backed mortgage holders impacted by the pandemic up to a year of reduced or delayed payments.” In addition, the Federal Reserve added measures to further stabilize the market with reduced borrowing costs. The result is record low mortgage rates intended to make home ownership affordable to more Americans.
Real Estate Adaptations in the Pandemic
Real estate professionals and mortgage lenders had to move quickly to adjust to the pandemic safety standards as well as the economic changes which came as a result. The safety of clients and team members was prioritized to minimize contact through the use of the latest technology. From online open houses to virtual viewings and video tours, technology has enabled real estate professionals to promote properties effectively for sellers and continue to give buyers excellent opportunities to view properties. Legal and financial documents are now handled digitally via smartphone, tablet, or computer. Even though timelines are a bit longer, and mortgage standards a bit higher, the real estate process has adapted well to ensure the safety of everyone involved in the process.
Is It a Good Time for You to Buy or Sell a Home?
Your circumstances are unique, so there is not a “yes” or “no” answer here to fit everyone. With the information provided here regarding the state of real estate, and the help of the following questions, you can decide if and when the time is right for you.
- Why do you want to move? Consider whether your reasons will change over the coming year. For example, the need for a larger home for your family won’t change in single year, while moving for the convenience of being closer to your work might be different in a year’s time as companies cement the pandemic shift to remote work.
- Is your moving timeline urgent? If your timeline is urgent like getting settled in before school resumes or the baby arrives, the time is now! On the other hand, if you’re flexible, you may be able to negotiate a great deal with motivated sellers who need to sell quickly.
- How long will you be in your home? With mortgage rates at record lows and home values steady or rising, if you plan to be in your home for several years, now is the ideal time to buy and start building your equity.
- Are you a well-qualified buyer? Because mortgage lenders have increased standards for minimum credit scores and down payment requirements, if you are a pre-qualified buyer, this could be the right time for you to buy a home.
- Do you have stable income? If your job is in jeopardy as a result of the economic downturn this may be the time for you to wait to buy a home. But if you are downsizing, you would be cutting expenses and tapping into your current home’s equity by selling your current home and moving to a smaller, less expensive one.
When You Are Ready to Buy or Sell – We can Help!
With the market uncertain, some buyers and sellers will wait, but for others who are motivated to make a move, opportunities are available with exceptionally low mortgage rates. At Coastal Home Team, we are ready to schedule a virtual consultation with you to talk over your wants and needs, help you evaluate possibilities, and create a plan to help you find your perfect home.