Page 15 - DEC2020

December 2020
Newfound Lake Life
Home Buying During COVID-19
Page 15 Real Estate
By Brittany amalfi
Homeowners know that the process of buying a home can be both exciting and nervewrack- ing. However, with the outbreak of the novel coronavirus, home buying anxiety has reached new heights.
When the pandemic started, real estate took a huge hit. Allan Destefano from Granite State Reality said, “When all of this started, no one knew how to handle it. Our company alone lost over eight million in transac- tions from our investors pulling the plug on deals.” People most likely thought that this would be over in a matter of weeks, but as time went on and the situation worsened, they realized they couldn’t put a hold on buying property forever.
Historically low interest rates and limited inventory has made 2020 an incredibly unique time to buy a home. Not only that, but It’s also a competitive and potentially expensive time to buy a home. While the economic consequences of COVID-19 have been severe, the Federal National Mortgage Association, also known as Fannie Mae, fore- casted a significant increase in median home prices in March 2020. City dwellers have scram- bled to buy homes outside of cities, where social distancing is more complicated, and the risk of getting COVID-19 appears greater than it is in suburban or rural settings. The competi- tion among prospective buyers is booming due to all this chaos.
Prospective home buyers
willing to enter the hectic fray and shop for a home during the COVID-19 outbreak may benefit from knowing what to expect as they search for their next home.
Get ready for virtual tours. “We had to get creative about how we would show properties differently,” says Allan DeSte- fano. Buyers might once have scoffed at the notion of buying a home they’d only seen in videos, but virtual tours have become the new normal in the wake of the pandemic. Destefano tells me he’s seen clients put an offer on a property after just one vir- tual walkthrough. As the market continues to speed up, people realize that they need to put in an offer right away if they want a chance to buy a home. An April survey from the National Association of Realtors® found that home tours had declined sharply. While 98 percent of re- altors reported taking clients on home tours as recently as Feb- ruary, that number had dropped to 63 percent by April. As many regions pause their reopening plans, prospective home buyers should ready themselves for vir- tual tours instead of in-person home tours.
Expect limited inventory. While home prices are up, many people are holding onto their homes. The NAR reports that the total housing inventory at the end of May 2020 was down nearly 19 percent from the end of May 2019. Buyers will have less inventory to choose from, so those who intend on buying may need to prioritize what
they need in a home and focus on finding properties that can fulfill those needs. “A big chal- lenge we face is that we don’t have enough properties to sell. People want to sell their homes, but they have nowhere to go,” Destefano states.
Expect to move quickly. Real- tors have seen homes sell within days of being listed, which has put pressure on buyers to move quickly. It also highlights the importance of finding a home inspector before your search begins as well as a lender who can handle quick closings. Ask around for recommendations, but make sure you have these two critical professionals lined up before starting your search. Doing so will give you a better chance of buying during an un- usual time. A silver lining with all of this is that the market isn’t likely to slow down. Destefano tells me that he “doesn’t see the
market slowing down as long as the interest rates remain low, which gives buyers more oppor- tunities to buy a home.”
Make the best down pay- ment you can afford. A high down payment makes buyers look better no matter the state of the economy. An offer with a high down payment looks like a stronger offer, and that can make the difference between winning and losing a potential bidding war.
Buying a home during the
COVID-19 outbreak presents some unique challenges to pro- spective buyers. In order to suc- ceed in buying a home, buyers need to come prepared. In these unpredictable times, it is benefi- cial to make a plan and stick to it. Understand your options and work with a trusted professional who will help you get that prop- erty you’ve been vying for. We’re living in dark and unforeseeable times; let’s do our best to main- tain a safe and smooth home buying process.
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