Several months ago, the question I was so frequently asked was “How is this pandemic going to effect the real estate market?”. My response was always the same “I have no idea, this is unique!”.
What we were Expecting:
I never expected a real estate “bust” like we saw 10+ years ago. The environment we found ourselves in years ago (before the big “bust”) is completely different than the real estate market right before the virus concern. The many triggers that were in play back then, for the most part, are not of concern today.
The real estate market, like other economic markets, are run largely on supply and demand. The common prediction was that buyers and sellers alike would decide for themselves if they were going to put their plans on hold, or if they were sufficiently motivated, stay in the market and pursue their purchase or sale. The National Association of Realtors chief economist predicted that the number of sales would be down, but that prices would remain stable primarily because supply and demand would remain balanced.
What we are actually seeing now:
Now that we are several months into the pandemic, it is apparent that the number of nervous buyers and sellers, who put their plans on hold, are not quite as balanced as we thought they would be.
Although many potential buyers, who were able to put their plans on hold, left the market (for now); a greater number of sellers have done the same.
Today, there’s a steady number of motivated buyers who want to purchase, and a far smaller number of listed homes currently on the market for sale. This has resulted in homes currently on the market (that are priced right) to sell quickly, and with increasing prices. The lower supply of homes for sale coupled with the steady stream of buyers is creating a shift in the market that few of us expected.
What this means for you:
If you, or someone you knew, had considered selling a property before the pandemic started, you may revisit your reason for waiting. Many people thought that the current environment would result in a declining (if not crashing) real estate market. As a result, many put their plans on hold because they did not want to risk selling low. We now know this is not the case, and has resulted in an unexpected sellers’ market.
I do also understand the concern of having strangers walking through your home in this current environment, it is a valid concern. However, because only truly motivated buyers are currently looking, sellers are experiencing far fewer showing before going under contract. With the ability to offer virtual showings, virtual open houses and digital marketing, fears can be minimized. The current real estate market has proven to favor sellers.
The risk of waiting:
Many of the sellers who had put their plans on hold will eventually want or need to sell their property. This is a “pent-up” supply that will eventually hit the market increasing our inventory of homes. In addition, unfortunately, there are still many people unemployed and may not be able get back on their feet in the foreseeable future. This could lead to an influx of foreclosures and will increase our inventory of homes. As more properties potentially hit the market, prices could soften or even decline.
Please contact us to answer any of your questions or to talk about your current situation.