Is Now A Good Time To Buy?
With social distancing being an important poart of life at the moment and so many parts of the economy suffering the effects of state lockdowns, some are worried about how all of this will affect the housing market. This is especially a concern for those who were hoping to buy a new home and have seen their plans potentially derailed by the pandemic. Is this a good time to consider buying a new home, assuming that it's even safe to do so?
Depending on where you live, the answer may surprise you!
It's a Buyers Market in Some Markets (but not everywhere)
With the current state of the world, the demand for real estate has dropped significantly in some parts of the US and Canada. This has left many of those who have already listed homes for sale or who were planning to list over the summer in a position where there are far fewer people looking at their properties. For some sellers, this isn't much of an issue, they can simply wait it out and stick to their previous plans. However, a lot of sellers don't have that luxury. For some reason or another, they have to sell. This creates a buyers market where a lot of sellers are willing to consider offers that they wouldn't have in the past, giving potential buyers a lot more control in the home buying process.
As the name implies, it's always good to buy in a buyer's market. It isn't necessarily a great time to list a home for sale, of course, since you'd likely have to settle for a lower offer than you were expecting if you want to sell quickly. This usually helps to balance out the market, with listing rates slowing down to meet demand until things pick back up again.
With that being said, not every market is experiencing this pandemic the same way. In fact, many markets remain a seller's market due to low inventory, mortgage rates, or any number of other local demand characteristics. For instance, here in the Tampa market, we currently have less than 2-1/2 months of inventory.
Demand is Staying Low in Most Markets
Most of the time, a buyer's market is caused by shifts in the economy that have people trying to save money; an example of this would be a recession. These economic shifts temporarily reduce the number of people who are willing to take on large debts, creating a glut of sellers trying to entice a smaller pool of buyers. A buyer's market typically fizzles out once the number of sellers shrinks or the economy stabilizes.
In the current buyer's market, the economy certainly plays a factor. However, there is an external factor at play here as well. The social distancing that COVID-19 requires has added additional concern about open houses and other forms of interpersonal contact that are traditional when buying or selling a home. There is still a lot of uncertainty surrounding the pandemic, including how long it will last, so with this external factor and the currently stunted economy, we could see demand stay low for longer than you would expect in a buyer's market.
This isn't to say that the market won't recover, of course. Some states have already started reopening non-essential businesses slowly, as well as other parts of the economy, and other states have plans to start reopening soon. The economy will likely stay sluggish for awhile, but reopening is the first part of recovery. Even the pandemic is becoming something less of a factor as people continue to practice social distancing and scientists continue to work towards treatment and a vaccine. While market recovery may take longer than in the past, a recovery will happen, and the good deals that buyers can find now will become less common as things move forward.
Shopping for a Home During COVID-19
If you do decide to shop for a home in the current market, make sure that you're smart about it and stay safe Maintain all physical distancing practices while looking at homes, even if there is only a seller or agent present. Ask whether no contact options, such as virtual tours or virtual closing with digital signing are options, and if physically touring the property, request that any doors or other barriers be opened, as well as all lights turned on before you arrive to reduce contact. Wear a mask, bring hand sanitizer and take the same precautions that you would in any other social situation. This may seem excessive for viewing a home, but keep in mind that these practices not only protect you, but also protect the seller and agent as well.
For more information on our No-Contact options for viewing a home, call the Prime Time Home Team at (813) 359-0880.
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