The COVID-19 pandemic has not only had a negative impact on the United States financially but mentally and emotionally as well. The real estate market is no exception.
Spring is usually the busiest time of time for the housing market, but that has changed due to COVID-19. Even in the best of market conditions, it’s not easy to buy or sell a home, but the “shelter in place” orders have made it even more challenging.
Like the rest of the USA, the real estate industry is on lockdown. New construction sales are non-existent. Real estate agents are unable to physically show homes to potential buyers, relying on online virtual tours. On top of that, there are fewer homes available to show. Appraisers aren’t appraising. If a home closing went under contract prior to the pandemic, the closing is done via Zoom – if it’s even completed at all.
What does this mean for the real estate market going forward?
The spring real estate market will be halted, especially as compared to previous years. According to the National Association of Realtors, nearly 60% of potential buyers are delaying the home-buying process for at least a couple of months. Additionally, about 15% of buyers are postponing their search for the time being.
Sellers are also delaying listing their homes indefinitely. Most sellers don’t want strangers in their homes, as some buyers could be unknowing COVID-19 carriers, nor do they want to move during a pandemic. As a result, the already limited available home inventory will be reduced further.
For sellers who still have their homes on the market, all are taking the necessary health precautions. Due to state and federal “shelter at home” orders, nearly 75% of sellers are not having open houses. For those sellers that are, 50% require prospective buyers to wash their hands and use hand sanitizer prior to entering the home. Buyers are required to wear gloves per seller request in 33% of open houses. Additionally, sellers are thoroughly cleaning and sanitizing before and after each home tour.
While less people are continuing their home search, it doesn’t mean home prices will drop – much to the dismay of potential buyers. Nationwide, only one-quarter of sellers have reduced their home price – largely due to the already limited housing inventory. This could also lead to a housing shortage which could potentially increase home prices over the summer.
The good news is that there will likely be a rebound once the COVID-19 pandemic is over. Those who were “sheltered in place” in their starter homes or small apartments will be on the hunt for a larger home, along those who were previously planning to buy until the virus postponed their search.
If you’re in need of mortgage financing or re-financing and aren’t sure what direction you need to go in, you can trust the experienced professionals at Pacor Mortgage. Give us a call today at 773-881-7744 to schedule a virtual appointment, or visit our website to learn more about how our services can help you.
2020 Pacor Mortgage Corp.
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