Prior to the pandemic, the conditions for the upcoming spring homebuying season were clear — demand was high, while the inventory and mortgage rates were low. This meant that for homeowners, it was the best time to refinance. On the other hand, it was a seller’s market, with homebuyers pitted against each other.
Thanks to the pandemic though, the once stable real estate industry is seeing changes on a daily basis. This suggests that there’s no telling what the market could look like once this is all said and done.
While history does suggest that pandemics don’t really affect home prices that much, we haven’t seen a pandemic ravage the economy quite as the COVID-19 has.
Case in point, banks and financing institutions have had no choice but to suspend mortgage payments. If this goes on any longer, we could see a liquidity crunch, or a scenario where the lenders no longer have the necessary capital to lend to interested home buyers. At the same time, people with below-average credit scores are already feeling the effects of the pandemic as they now find it near-impossible to qualify for a mortgage.
But, then again, on the flip side, if the mortgage industry is not as affected as expected, we could see the housing market recover quickly and get right back to where it was before all of this happened.
At the moment though, that’s akin to wishful thinking. The truth is, even if the mortgage industry doesn’t end up a lot worse, the economy surely won’t be the same.
With more and more companies feeling the brunt of the effects of the pandemic, people will have less money to spend on a new home. This could lead to a drastically lowered demand for real estate.
What Interested Home Buyers Should Do
For potential buyers who were already in the market before all of this happened, the pandemic isn’t all that bad.
If you’re looking to buy property in the next couple of months, there’s a high chance that there won’t be as much competition. It would probably still be a seller’s market. This is because real estate never really is as affected as other industries whenever a recession happens.
Situations like newly married couples wanting a new house, or a growing family needing a bigger nest, or empty nesters looking to downgrade, will always be there. Even if a full-blown recession does happen, the housing market should survive. In fact, there’s enough evidence to show that home prices could go up in case a recession does indeed happen. This is especially if the mortgage industry doesn’t bounce back as fast.
With that said, interested home buyers might find it in their best interest to wait things out unless absolutely necessary.
The prospect of having fewer competition while bidding on your dream house should be enough to incentivize waiting, even if it comes at the expense of having to deal with a higher asking price or less than ideal mortgage rates.
Is It A Good Idea to Sell House Now?
“Should I sell my house NJ?”
This is the question that many home sellers are probably asking themselves right now, and the truth is, it depends. However, if you don’t really need the money just yet, you’re better off waiting for things to pass.
There are fewer buyers on the market right now and you might want to hold on to your property just in case the value increases once this is all said and done.
If you do have to sell your house fast though, you might want to consider selling to a local cash buyer.
By selling to a local cash buyer, you all but guarantee that the transaction goes smoothly and with little to no delay. Not to mention, selling a property during these turbulent times through conventional means is not easy. But, since you’re dealing with a cash buyer, that property is already as good as sold as soon as the two of you agree on a price.