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As We Look At A Post-COVID-19 World, How Will Real Estate Be Affected?

By June 11, 2020 at 2:40 pm
As We Look At A Post-COVID-19 World, How Will Real Estate Be Affected? (Photo : Pixabay)

The emergence of a global pandemic has affected every aspect of our lives, including the economy, and that includes real estate. As a potential buyer or seller, you might be wondering how real estate might shift in the post Covid-19 world. While we are living in times when the market can change unexpectedly there are some general situations to be aware of now, at the beginning of June 2020. 

Buyer demand is still high

People who were ready to buy before Covid-19, are now more ready than ever. Spending weeks at home can put a spotlight on how much you want to move into a bigger space, or one that better suits your needs. As people emerge from shelter in place restrictions, buyers are ready, even in the post Covid-19 world - agent-reported real estate data for the end of May continues to move in a dramatically positive direction, according to results from HomeLight's latest market pulse survey. In fact, real estate agent optimism surpassed Q4 2019 levels, and the percent of agents who said their business is growing nearly tripled from April 2020.

Home prices aren't declining dramatically, yet

At the end of May 2020, agents who said home prices are on the rise increased by 81 percent, as compared to the middle of May 2020. As unemployment rates shift, and the economy goes through waves, this could change, but for now, prices are the same or higher than they were before the pandemic, especially as there is increased buyer demand.

Sellers are ready, even if it's virtual

Like buyers, sellers are ready to realize their real estate dreams now that people have more freedom of movement, however, sellers are still taking extra precautions when it comes to showing their homes. That might mean that they are opting for virtual tours and showings to ensure safety post-Covid-19. These virtual tours might be one-on-one showings, or scheduled video meetings like an open house, or, sellers might work with their agents to create videos or virtual tours that can be watched by potential buyers on demand. Even post-Covid-19, it's still possible to show homes, and complete successful sales. At the end of May, only 13 percent of agents said they had seen seller activity in their market decline, as opposed to the middle of May, when 78 percent of agents reported a decline in seller activity. Moreover, at the end of May, 85 percent of agents said sellers were keeping their homes on the market. That means that sellers are adapting to this new virtual reality. 

Financing may be more difficult for buyers

One reality of the post Covid-19 world is that some people, faced with unemployment, are struggling to make their mortgage payments. The result of this is a surge in refinance applications, which has caused some lenders to raise interest rates, and others to temporarily stop accepting applications - when lenders get more applications than they can handle, they tend to raise rates to try to decrease the demand. Lenders who are still accepting applications may have stricter guidelines than usual. That means that the hurdles to get a mortgage on your new home could include a high credit score, major down-payment, references, and even proof of steady employment.

The post-Covid-19 world is full of changes across the board, but if you want to sell or buy a home, it's still possible, it just requires staying attentive to the market, and laser focused on your goals. 

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