Despite COVID-19 wreaking havoc over many industries in the United States, the real estate industry remains resilient in the face of this global pandemic. While there are short-term difficulties of buying or selling a home like social distancing, canceled open houses, and stricter in-person house tours, the US housing market seems to be recovering much faster than any other sector to date.
This development has spawned great opportunities that may not have presented themselves in a regular housing market climate. Let’s look deeper into these opportunities:
For buyers
Lower interest rates
To protect the economy from the blows of recession brought about by the pandemic, the Federal Reserve has been cutting interest rates starting March. These lower interest rates are meant to give buyers more purchasing power and the opportunity to lock in their mortgage rates.
Since interest rates have a direct effect on mortgage rates, more Americans now have higher chances of owning a home. Moreover, they can afford more expensive properties while still paying the same monthly mortgage payments.
Mortgage rates for a 30-year fixed term now stand at an average of 2.87%, according to Freddie Mac’s September mortgage market survey. Another report in the New York Times notes that this is the first time these said rates have dipped below the 3% baseline.
Note, though, that getting the best possible rate isn’t a given. This will also depend on your current credit score.
Finding incredible real estate deals
If you plan on buying a Pacific Heights home for sale during the pandemic, you have the opportunity to get a good deal on your preferred home. Once you find a house that you want to purchase, negotiate for the ideal price and use the current market to lock in your ideal rate.
Investing in rental properties
Buying long-term rental properties are a great opportunity for both first-time and experienced investors, especially if you find one that’s in a strong housing market. With the pandemic affecting real estate market values, you can get great deals even from the most overpriced markets in the United States. However, it is still prudent to have a good grasp of the risks of buying investment properties like rentals and to determine if these risks are really worth taking.
For sellers
More buying competition
Home-buying behavior has shifted during the pandemic. Buyers are consuming the housing inventory faster than ever. Those who have previously rented homes are now looking for affordability and stability in their real estate decisions. That’s why many are choosing to dive into the housing market.
According to the Herald-Tribune, the increase in demand and the reduced inventory has led to high home prices in the majority of US housing markets. A 4.1% increase year-on-year was seen in U.S. median home values, standing at almost $249 thousand, as reflected in Zillow’s August 2020 report.
This spells good news for sellers since the demand for homes is strong and buyers are snatching up properties as soon as they’re listed.
Less housing inventory
Due to the pandemic and the uncertainty of the economy, many home sellers are hesitant about putting their homes on market, thus, causing a drop in the housing inventory and driving up the market values of those for sale. As a home seller, you are sure to attract a good number of interested buyers and receive multiple offers.
Looking to buy or sell San Francisco real estate during the pandemic? Let me, Amir Hardy, be your guide. Feel free to call me at 415.602.0570 or send me an email at amir(dotted)hardy(at)compass(dotted)com.