Buying During Coronavirus

Buying During Coronavirus

The coronavirus has affected businesses all over the world and the real estate industry is no exception.

How the Coronavirus Has Affected Buyers

The coronavirus has caused many businesses to close on a temporary or permanent basis. Now, as cities start to reopen, many still face financial uncertainty. Businesses are trying to recover from the economic impact of being closed for three months and many are opening in limited capacity to slow the spread while keeping an eye on their bottom line.

As a result, many employees are uncertain of their financial futures. They are wondering whether they will be able to return to work at all, and if they do, they are concerned that their hours or salaries may be cut.

Those that are concerned about their economic situations will be in no position to buy a house.

Lending

Lenders are hesitant to approve loans as they are wary of anyone that applies for a loan. The economic uncertainty means even those who seem to be in good shape to repay a loan today may not be so lucky tomorrow. Banks understand this and have tightened up their criteria.

Open Houses

The coronavirus has also made it more difficult to conduct open houses and to show properties at all.

Showing a property requires human contact and, with all the social distancing being enforced, people are going out of their way to stay physically separated from others. As a result, many open houses have been canceled completely (as in Washington for example). House showings are by appointment only.

Most people are not going to buy a home without being able to see it first, so the lack of open houses and showings is a major obstacle.

Housing Prices

Depending on your housing market, prices have not necessarily come down significantly, if at all. In Seattle for example the prices have not dramatically decreased for several reasons.

1)      Many first time home buyers still have secure jobs. Unemployment is worst in the labor sectors that primarily rent. The Tech industry on the whole has not experienced high unemployment. Major employers like Amazon and Microsoft are still hiring and bringing in talent from out of state and country.   

2) There is very little supply. Many sellers have “temporarily” taken their homes off the market in hopes of selling in a “hotter market” down the road. A lack of supply in the market place keeps the price up. Nationally, there are (approx.) 2 million homes on the market, compare that to the last financial crisis that had about double (4 million) the amount of homes for sale.  

Pent up Demand

The downturn caused by coronavirus may lead to an upturn when the lockdown restrictions are removed. It is expected that buyers will be flooding the market eager to make a deal and take advantage of low interest rates.

Those that are interested and able to buy should keep an eye on the market and be ready to pounce when they see the right home.

Real Estate Coronavirus Tipsheet

Here are some tips for home buyers and their realtors on how to house hunt during the pandemic.

For Buyers:

1) Refine your search criteria. Of course you've already talked about the features you want in a house, now is a chance to redefine what you need. What is most important? What are deal breakers?

2) Get a floor plan. For some this isn't the most intuitive way to understand a space- it's a great time to learn!

3) Ask for a video walk through. If your realtor can Facetime you through, that's even better.

4) Don't go house touring if not all decision makers are present.

5) Use your realtor! Ask them their impressions and advice.

For Realtors:

1) Video walk through of house (either live or recorded). Move slowly. Narrate what you are seeing. Tell the audience what they can't see- for example, is the yard flat, is there street noise, natural vs artificial light.

2) Bring a tape measure!

3) Get your clients as much information as possible ahead of time. Information on: the neighborhood, previous ownership, easements or restrictions, etc.

4) Challenge and guide your clients. Make sure that the house they are interested in seeing really fits their needs.

5) Use a Matterport 3D camera. This allows someone to virtually tour the home at their own pace, looking in all directions. It also creates a digital floorplan allowing clients to understand the full house layout.