Kids furloughed from school, bars and restaurants closed, and people told to stay at home except for essential errands—the coronavirus pandemic has already upended life as most Americans know it. Now it's expected to turn the typically busy spring home-buying season on its head as well.
Despite the extremely low mortgage interest rates, the nation could be in for a rocky home-buying season. A recession triggered by COVID-19 appears to be on the way, and the stock market has plummeted, giving many buyers pause. There are also likely to be fewer homes on the market, longer closing times, and plenty of unanticipated delays in the coming weeks.
More than ever buyers and sellers both will be relying heavily on their Realtors to bring transactions together. We are in a time when many things are unknown, and we’ll all be learning as we go along as to what works and what doesn’t. Buyers and homeowners should also realize the chaos is unfolding in real time.
Sellers are anxious about potentials buyers, Realtors, Inspectors and Appraisers coming and going within their property. Equally, Buyers have many of the same anxieties but the added stress with properties appraising at true values before this crisis or if they’ll be able to meet the requirements necessary for financing such as income stability depending on their career field.
Some buyers are worried about contracting the COV-19 virus. Others are hesitant to deplete their life savings and lock themselves into a 30-year loan with a potential recession on the horizon. And many are concerned about both.
It is expected that seller’s that can wait to list their property for sale will do so and those that do take the risk of putting their property on the market will do so knowing they may be taking a cut in profit.
Is it safe to continue showing properties in person or will many agencies switch over to electronic tours, essentially buying a home without ever stepping foot in it? Will we remain a buyer’s market or will that soon switch to a seller’s market due to the infinite of uncertainty in the marketplace?
We are headed into Spring Selling Season but it’s not clear if sellers will continue to list properties for sale or if buyers will be left to choose from what’s been on the market all winter? Representing either side of the transaction will be challenging. Whether you’re buying or selling, determining the value of a home will become more difficult with each passing day.
What’s Plan “B” for both buyers and sellers if appraisals come in significantly under the contract price. Sellers might have to reduce their contract price and/or buyers may need more funds for down payment.
The uncertainty doesn’t change people’s long-term desire to own a home. They may not be brave enough to jump in and submit an offer now, given all the uncertainty. But they’ll still be looking.