Spring is here, which typically involves a big peak of home buyers checking out Arizona properties, negotiating, and closing on new homes. But the coronavirus outbreak—with its quarantine measures and economic uncertainties—has many a real estate shopper wondering: Should I buy a home now, or wait?
I’ve been asked this a lot lately and I’m always here to help you navigate this confusing “new normal” with this post, Home Buying in the Age of Coronavirus.
This info below aims to help you figure out whether you can, should shop for a home right now, or hold off until this crisis is over with. Here are a few honest answers that will help you decide what to do. Oh by the way, I am a Chinese Realtor serving Chandler, Gilbert, Tempe, Scottsdale; and Phoenix. If you have any friends who can use my services to help them sell their home or buy another home; please have them call me.
The impact of the coronavirus on the housing market:
So what state is the housing market in right now, anyway? While that depends on how bad an outbreak an area is suffering, most markets are feeling some sort of hit for sure. As of April 27, 2020 The housing market is still strong, due much in part to the shortage of inventory, and high demand in greater Phoenix. I suspect the market will be somewhat insulated from the crisis due to supply/demand and the growth rate of Maricopa County.
“The coronavirus is leading to fewer home buyers searching in the marketplace, as well as some listings being delayed,” says Lawrence Yun, chief economist for the National Association of Realtors®.
The latest NAR Flash Survey: Economic Pulse, conducted on March 16 and 17, found that 48% of real estate agents have noticed a decrease in buyer interest attributable to the coronavirus outbreak.
However, nearly an equal number of members (45%) said that they believe lower-than-average mortgage rates are tempting buyers to shop around anyway, without any significant overall change in buyer behavior.
For those who are determined to buy a home, there is opportunity out there!!
“This is the best buyer’s market I have ever seen in my career,” says Ryan Serhant of Nest Seekers and Bravo’s “Million Dollar Listing New York.”
With fewer home buyers out there looking, you have less competition in your way and that’s a huge leg up on the competition.
The window of opportunity for buyers won’t stay open wide forever. NAR data shows that there was a housing shortage prior to the outbreak.
“The temporary softening of the real estate market will likely be followed by a strong rebound, once the quarantine is lifted,” says Yun.
This pent-up demand could eventually push home prices higher. That could mean that the time to strike for bargains is now.
Bottom line: If social distancing has made you realize you don’t love the place where you’re currently spending most of your time, it’s a good time to consider buying.
How the housing industry has adapted to keep buyers safe:
Although it seems like a scary time to be out and about checking out real estate, it is still possible to do so and stay relatively safe. The industry has rapidly adapted, introducing approaches that minimize exposure to the virus.
For instance, many agents (including myself often.) are now working remotely and conducting most of their business virtually.
Buyer and seller consultations have transitioned to virtual meetings with great success! I love being flexible to all of my clients!
While open houses or showings may not be easy to arrange because of quarantine or other safety issues, real estate listings have stepped up to the plate and offer virtual tours – the next best thing!
If there are a list of homes you’re considering, let me preview them for you via Face-time and lets get a better feel for what you like most out there and what looks “too good to be true” in the photos!
While those who are a higher risk may want to stay home, if you’re otherwise healthy, it is also still possible to see some homes in person in some parts of the country. You’ll want to take some precautions before you go.
Hand sanitizer at the door has become the norm, as well as shoe covers. Respectful.
During the tour, it’s also now customary for the listing agent to open all doors (wearing gloves), so that home buyers can explore closets and other enclosed spaces without touching anything as they look for themselves.
If you do make an offer that’s accepted and you head to the closing table, title companies and lenders are also adapting to remote closings, to keep you out of a crowded conference room. This has been very normal in AZ for years anyhow.
How to weigh economic concerns:
Coronavirus aside, keep in mind that while current market conditions offer an incredible opportunity for home buyers to lock in historically low interest rates for a mortgage, rates are actually going up quickly, because so many people are refinancing.
If you wait too long to buy, you may miss the money-saving boat. So make sure to read up on the latest mortgage rates first and call me for my advice!
Putting a property under contract now and locking in a low interest rate gives a buyer some control at a time of relative uncertainty, which is a great feeling to have.
The takeaway from all this? It matters more than ever to get pre-approved for a mortgage, to calculate your home-buying budget accurately.
If you’re worried about layoffs, you should buy a home well under budget so you have enough money left over for closing costs (or ask the seller to split with you,) home maintenance, and a rainy day fund. Now is the time to crunch your numbers more carefully than ever before. Below is what you need to consider.
Research ways to reduce your closing costs. For instance, many loans allow sellers to contribute up to 6% of the sale price to the buyer as a closing-cost credit.
Figure out how much you need to set aside for yearly home maintenance and repairs. A smart budget is to have between 1% and 4% of the purchase price of your home.
Be sure to put aside an emergency nest egg for unexpected repairs. On average, it’s a good idea to sock away 1% to 3% of a home’s value in cash reserves.
Thank you so much, stay safe, and if you’re feeling great and wish to get thing s moving quickly just give me a call and let’s talk. It’s a great time for foreign investors as well, and as you all know, I’m fluent in Chinese! I love all referrals and it’s always my pleasure to assist in any way that I can. I will be talking with you soon! Christy
