COVID-19 has affected real estate listings and made the home selling and buying process more of a challenge. Understanding the ways in which the real estate market has changed due to stay-at-home mandates, personal health concerns and other effects of COVID-19 can help you prepare and decide if buying or selling a home during the pandemic is right for you. Working with a qualified listing agent can help you in your process, and ease any stress you may have.
The Effect Of COVID-19 In Real Estate Listings
Like almost every industry, the housing market has taken a significant hit due to COVID-19. This is due in large part to many businesses temporarily and permanently closing, financial uncertainty from high employment rates, state-ordered stay-at-home mandates and not knowing what to expect during the home buying and selling process.
There is also an inability to see the home in person because of state mandates or personal health concerns. Many prospective buyers simply prefer to wait until the COVID-19 pandemic has passed so that they can see the home before purchasing, rather than purchasing a home sight unseen.
COVID-19 has also had an impact on construction and renovation. This is of course the result of many construction crews temporarily closing due to safety concerns and a lack of construction and home decor supplies being sent from China.
There has also been an increase in delayed closings due to COVID-19. Many are not able to make it to the closing because of travel restrictions and stay-at-home orders. This has led to many closings continually getting pushed back as states wait for the number of cases to decline. Also, many buyers are not willing or able to close until after they have seen the home in person. Often, the home closing is contingent upon the buyer seeing the property.
Longer delays between the buying agreement and the home closing have also led to more cancelations. This can be damaging to a seller as it puts them back to square one if they do not have a backup plan. A real estate listing agent can help with the closing process, ensuring the deal is able to close in a timely manner. They may do this through a remote closing or by reducing the number of people required at the home closing.
One of the few bright spots of the housing market during COVID-19 is mortgage rates, which hit an all-time low in 2020. According to Freddie Mac, the average 30-year fixed mortgage rate is at 3.03 percent, a percentage that seemed unreachable at this point in 2019. In fact, the mortgage rate in some areas reached close to 5.0 percent last year.
The lower mortgage rates are intended to encourage prospective home buyers to be more proactive in their efforts, and the idea of enjoying lower monthly payments due to the lower rates is certainly intriguing for many. There is little doubt that the mortgage rate will quickly increase once the number of COVID-19 cases decreases, especially if there is a spike in home purchases, so those who are interested in the lowest interest possible should consider purchasing now.
Also, many are taking advantage of the lower interest rates to refinance, especially by reducing the number of years they have left on the mortgage to best capitalize on the opportunity.
Luxury Homes Could See A Boost
The demand for luxury homes could see a significant increase during the pandemic. This is due in large part to the lower interest rates making luxury homes more affordable and putting more people in the financial position to purchase the home of their dreams.
In addition, there are more international purchases of U.S. luxury homes and land due to the increase in financial certainty properties inside the U.S. offer that other countries may not. This is also a mindset that many Americans have adopted as well, and capitalizing on more affordable land that is more financially resistant to pandemics and other complicated situations is an interesting approach.
In essence, COVD-19 provides a perfect storm for luxury home sellers and buyers. Buyers have an increased urgency to purchase before mortgage rates increase, making it easier to close deals for many sellers.
There are also fewer luxury homeowners selling, making the demand more limited for prospective buyers. In some instances, luxury homeowners can get away with charging higher prices due to the savings buyers will have because of lower interest rates and the increased demand for luxury homes in many areas inside the United States.
Work With An Experienced Listing Agent
Get in touch with our real estate listing team at the Katie Zarpas Group for more information about real estate listings during COVID-19. We pride ourselves on our ability to adapt and continue to list and help sell homes, regardless of any obstacles the pandemic may present. Working with a qualified listing agent can greatly improve your process, and help you stay informed along the way. Reach out by phone at (757) 685-4400 or schedule an appointment today to learn more.