COVID-19 has impacted nearly every industry in America and the real estate market has experienced a series of notable changes. Here are the five most common real estate myths that I’ve been hearing from clients, along with what you should know about each:
1. There is less competition with buying a home. You may be inclined to think that with so many people forced to stay at home and put major life changes on hold, buying a home is a less competitive experience. However, with motivating factors such as lower interest rates, there has been an increase in buyer demand. Buyers who are shopping for homes are more likely financially secure and able to make strong offers. We have a lot of multiple offer situations. Many current homeowners are also looking to capitalize on low interest rates for mortgages and opting to refinance. This has overwhelmed lenders and increased the average closing time. I recommend getting pre-approved before home shopping to have a clear idea of what you can afford. It can help your offer stand out, and many sellers are requiring pre-approvals before allowing showings.
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As long as there is demand for homes, prices will remain stable.
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2. People aren’t selling their homes during a pandemic. While recent data suggests that 77% of potential sellers are planning to sell their properties once stay-at-home orders are lifted, many people are not waiting. With safer self-service options available, more sellers have re-entered the market. Realtor.com has found that our inventory shortage has declined and is improving dramatically.
3. The economy and real estate market are going to crash. While we don’t yet know the full effects of the crisis, it’s clear that the real estate market is in a much better place than it was in 2008 because of strong equity positions. It’s common practice for today’s homebuyers to put 20% down so they immediately have equity built up in their investment. That way, even if they have to sell quickly because of an emergency, they would likely still walk away with cash in their pockets.
4. Home prices have dropped dramatically. Although I’ve heard a lot of conversation about buyers waiting for prices to drop, it hasn’t been the case, and expecting to see a dramatic change isn’t realistic. People always need homes to live in and as long as there is demand, prices will remain stable or increase slightly. Overall, whether prices increase or decrease will vary market to market, but I don’t predict a drastic change.
5. It’s unwise to buy a home without visiting it in person. It may seem strange to think about buying a home without ever stepping inside, but technology has allowed us to get a sense of space in a home without being there and with health and safety top of mind for homebuyers, the real estate industry has innovative ways to visit through Facebook, Zoom chats, and other digital visits. More people are taking online tours.
If you have any questions for us about what’s really going on in the market or about real estate in general, don’t hesitate to reach out via phone or email. I look forward to hearing from you.
COVID-19 has impacted nearly every industry in America and the real estate market has experienced a series of notable changes. Here are the five most common real estate myths that I’ve been hearing from clients, along with what you should know about each:
1. There is less competition with buying a home. You may be inclined to think that with so many people forced to stay at home and put major life changes on hold, buying a home is a less competitive experience. However, with motivating factors such as lower interest rates, there has been an increase in buyer demand. Buyers who are shopping for homes are more likely financially secure and able to make strong offers. We have a lot of multiple offer situations. Many current homeowners are also looking to capitalize on low interest rates for mortgages and opting to refinance. This has overwhelmed lenders and increased the average closing time. I recommend getting pre-approved before home shopping to have a clear idea of what you can afford. It can help your offer stand out, and many sellers are requiring pre-approvals before allowing showings.
“
As long as there is demand for homes, prices will remain stable.
”
2. People aren’t selling their homes during a pandemic. While recent data suggests that 77% of potential sellers are planning to sell their properties once stay-at-home orders are lifted, many people are not waiting. With safer self-service options available, more sellers have re-entered the market. Realtor.com has found that our inventory shortage has declined and is improving dramatically.
3. The economy and real estate market are going to crash. While we don’t yet know the full effects of the crisis, it’s clear that the real estate market is in a much better place than it was in 2008 because of strong equity positions. It’s common practice for today’s homebuyers to put 20% down so they immediately have equity built up in their investment. That way, even if they have to sell quickly because of an emergency, they would likely still walk away with cash in their pockets.
4. Home prices have dropped dramatically. Although I’ve heard a lot of conversation about buyers waiting for prices to drop, it hasn’t been the case, and expecting to see a dramatic change isn’t realistic. People always need homes to live in and as long as there is demand, prices will remain stable or increase slightly. Overall, whether prices increase or decrease will vary market to market, but I don’t predict a drastic change.
5. It’s unwise to buy a home without visiting it in person. It may seem strange to think about buying a home without ever stepping inside, but technology has allowed us to get a sense of space in a home without being there and with health and safety top of mind for homebuyers, the real estate industry has innovative ways to visit through Facebook, Zoom chats, and other digital visits. More people are taking online tours.
If you have any questions for us about what’s really going on in the market or about real estate in general, don’t hesitate to reach out via phone or email. I look forward to hearing from you.