In this environment of economic uncertainty, is now the time to swoop in and get a house for super cheap?? Not so fast.
When COVID-19 reached pandemic status, there was initially a significant drop in buyer demand. Take a look at the graph charting changes year-over-year for Zillow page views. Throughout the month of March, demand dropped considerably compared to the 2019 spring kickoff. With fewer buyers driving up demand, a few savvy (and lucky!) buyers were able to take advantage of below-market pricing. But, residential real estate bounced back surprisingly fast. For much of the greater Baltimore area, the inventory of homes for sale has remained incredibly low. This has kept prices at market rates, and quality properties are often receiving multiple offers for sale. Berkshire Hathaway HomeServices actually had a better June 2020 than they did in 2019!!This surprises a lot of people. There are a lot of folks still hurting financially, and this surely is preventing certain buyers from buying the home they desire. But many skittish buyers that held off in March still need to move, and the summer provides a compelling time to shop and move for families. Plus, buyers are jumping at historically-low rates, which are currently hovering close to 3.25%.So what does all this mean? Right now, sellers should be confident in listing their homes. Primarily driven by low inventory and incredible interest rates, prices remain strong even if some buyers have exited the market due to COVID-19. For prospective buyers, definitely speak with your lender to get a consultation on how to take advantage of these interest rates. Based on historical figures, I believe it’s unlikely to see significantly lower interest rates in our lifetime. But this isn’t like the last recession where housing bargains were to be had everywhere, fueled by a foreclosure crisis. This may be a great time to get an affordable loan for your dream home, just don’t expect to “steal” it in this market.