Spring is typically a busy time for buying and selling homes, but the coronavirus pandemic has pushed homeowners and shoppers into new, uncharted territory. Shelter-in-place orders and concerns about contagion have forced many real estate agents to cancel open houses, while unemployment is at a historically high level.
But even in the midst of a deadly pandemic that is devastating the economy, many Americans still want or even need to buy a home in the near future.
“I definitely have clients that are still interested in viewing homes but have been honest that they won’t put pen to paper and write an offer until they know the health crisis has passed and they can assess the impact on real estate and the economy,” says Noah Grassi, a Realtor® for Compass in San Diego.
So, what does the current state of the housing market mean for buyers? With so much uncertainty these days, buying—or planning to buy—a home during a pandemic requires extra careful consideration. That’s why we reached out to real estate agents to get their honest takes on what’s really happening in the housing market in the time of COVID-19, how buyers can prepare, and what we can likely expect when the pandemic subsides.
There may be some reductions in home prices
The federal government has provided relief through cash payments, and lenders are also offering mortgage forbearance options. But with unemployment numbers rising, more people could be forced to sell their homes or enter foreclosure, potentially leading to reductions in home prices.
“Due to millions of job losses per week, and the long-term impact of COVID, I expect housing prices to shift into a downward trend,” says Justin Brennan with Brennan Real Estate Group, Pacific Sotheby’s International Realty. “To what extent they go down will be determined by how many job losses become permanent versus temporary.”
If the price cuts materialize, that would be good news for buyers in locations where affordability was already stretched thin.
More homes will come onto the market
A bigger inventory of homes on the market may soon be on the horizon for buyers.
“There’s an inventory of sellers on the sidelines, and it is growing every day,” says Grassi. “These are owners that still reside in their property and don’t want strangers—agents and potential buyers—walking through their home at the moment due to the health crisis. Once it is clear the risk is minimal, I think we are going to see a big increase in the number of homes for sale.”
There’s a chance that buyers are also waiting in the wings for the coronavirus pandemic to end and the economy to get back on its feet. But the likely big inventory of homes for sale could put buyers in a good position.
Interest rates are likely to stay low
Over the past few months, mortgage interest rates have been lower than we’ve ever seen. And experts expect that trend to continue.
“The general consensus of the experts is that mortgage interest rates will remain attractive for many months to come,” says Grassi. “If buyers are hoping to try to find a deal on their mortgage during this health crisis, they should be writing offers now.”
If low mortgage rates and being stuck indoors have convinced you it’s time to find a new home, this may be a time to consider buying.
Keep in touch with your mortgage lender
Serious buyers should always have their mortgage lender on speed dial, but in these unprecedented times, this advice is more relevant than ever.
“Make sure you are constantly speaking with your lender on updates in the lending market,” says Brennan. “If you fall in love with a home, focus on the long term and getting a great interest rate and payment versus trying to time the market.”
Anayat Durrani is a freelance education reporter for U.S. News and World Report. Her work has been featured in Military Officer, California Lawyer, the American Scholar, and PracticeLink magazines.