Not everything we are told regarding the pandemic is true. When it comes to real estate, facts are often twisted to suit the desires of the storyteller. In this post, we are busting five myths spreading about the real estate market during coronavirus.
1. It's the worst time to sell
You probably know a friend who wanted to put their property on the market this season, but put those plans on hold, and they aren't the only ones. This time last year, compared to now, we see home listings have dropped by 14% at the beginning of July, while home inventory is 32% lower as of mid-July.
Uncertainty and the fear of catching covid is the main reason why homeowners are keeping their properties off the market, however, statistics show that now is a one-of-a-kind opportunity for selling a home since buyers are competing for housing which means its a seller's market.
2. Housing selling prices are dropping
Housing selling prices are actually rising, and fast. The national median selling price for a single-family home has increased by over 7.5% during the first quarter of the year. Selling prices are growing faster than before the pandemic. The main reason is the lack of supply and record-low mortgage rates.
3. Buyers are delaying home purchases
Pending home sales have escalated 44.3% in May which is the largest month-over-month increase since 2001, according to NAR's Pending Home Sales Index. In fact, last time we checked Boston had more bidding wars than anywhere in the country.
Low-interest rates are helping since buyers can lock in a rate that they wouldn't be eligible for before the pandemic. Not all borrowers can qualify for the lowest rate, however, they are still lower than they were, which makes real estate investing a possibility for many new buyers.
4. Open houses and showings are prohibited
Social distancing is crucial, which is why showings and open houses were temporarily suspended. This pushed us towards virtual showings, but things have changed. Most restrictions are lifted and homes can we're back to touring homes while taking every precaution to protect everyone's health.
Some requirements from agents to buyers before an open house or showing is to bring masks, have no coronavirus related symptoms, and have pre-approval letters before they can step in a house. Also, scheduling a viewing is a common practice to make sure no more than two parties are in the property at the same time.
5. All buyers are after the suburbs
This myth makes sense. Crowded cities like NYC are breeding grounds for Covid. Suburb listings are getting major attention from buyers, property views in the suburbs are almost doubled that in urban areas. Home-buying demand recovered faster in the suburbs than in metro areas. Yet, it does not mean all buyers are moving to the suburbs. We're even getting a lot of callers asking about condos and apartments in the city. It looks like everyone just wants to grab their favorite type of lifestyle, and Covid has made that easier. Borrowing is easier, and working form home means that when people start going back to the office, they can probably sell their bosses on letting them work remotely indefinitely. One thing's for sure, we're still looking out for those condos.
Remember to contact us at Castles Unlimited with all of your real estate needs.