The pandemic has impacted most of the aspects of our everyday life, from the smaller details to the big events, like buying a home. As expected, buying a home during a pandemic is quite the different affair. But what, exactly, should you expect from the process?
Everyone thought that the pandemic and the resulting recession would lead to another housing crash, but surprise – the real estate market is positively booming. There have been more homes sold in 2020 than the previous year, and the years before that. What you can expect is stiff competition, low mortgage rates, high prices, and a lot of time spent Zooming.
Mortgage rates are collapsing
The good news is that mortgage rates have actually been going down, which can increase affordability. But that depends on where you’re planning to buy, on what kind of mortgage, and what kind of house. Mortgage rates dipped below 3% for a good chunk of 2020, and have remained low in 2021, but they’re not necessarily going to stay there.
However, even in the event of the probable increase, it is expected that it will reach 3.1% to 3.2%, according to Forbes. That means that it may very well be the perfect opportunity to spring for a new home. But keep in mind that a lot of other buyers have gone through the same thought process and competition is high.
It’s also important to remember not to overextend yourself financially just because mortgage rates are down. Paying up to 30% of your income makes good financial sense, but anything over that puts you in the danger zone.
Prices are going crazy
The very first thing you should know is that the market is a little all over the place right now. A lot of people panicked when the pandemic hit, or they had to make an emergency relocation to be closer to family, so there have been some big changes shaking up the real estate market.
As you may have heard, people have been fleeing cities in droves, causing the prices to go down in urban environments. If you were looking to buy in the city, now is your chance to snag something up in this historic dip in the market.
As for suburban homes – all those people moving away from cities had to go somewhere, and they all chose suburbia, so prices have gone way up. If you’re hoping to buy in a suburban area, be prepared to pay, and overpay. Bidding wars are common in the hottest areas, so you have to fight for the home you want.
Houses are going fast
And speaking of how hot the market is – homes are flying off the listing websites. In a shocking turn of events, the pandemic has not deterred buyers, as expected, but it has, instead emboldened them, and pushed them to make a big move. In certain areas, it is very much a seller’s market right now, and if you want to secure a home, you need to do so quickly.
Buyers are prioritizing location, size, and outdoor space. Since everyone has been stuck at home, it has become apparent that the quality of life just isn’t as high in a small city apartment, especially if you have to work from home. Between the home office, a space for kids to go to school online, a playroom, a family room – homes with 3, 4, or more bedrooms and a yard are selling like hotcakes.
You’ll probably view the home over Zoom
What you should also expect, given the current situation, is that home viewings may not go exactly as planned. In fact, depending on your location and the current level of infection, you may not be able to view the home in person at all. Lots of people have bought homes sight unseen this year, so you have to decide whether that’s something you’re willing to do.
With the technology and the widespread internet access available to us today, viewing a home over Zoom is easy and quite comprehensive. The videos take you through the whole house, giving you a sense of the full space, as well as focusing on some of the details you may be interested in. It’s not a perfect solution, but it’s one that enables the real estate industry to keep going during a difficult time.
The alternative might be to do individual viewings. You may not be permitted to view the home with your real estate agent, but you can both view it one at a time, equipped with masks, and then discuss the property safely outside. Either way, don’t expect traditional open houses to resume before the situation is under control.
We do our best with what we’re given, and while the pandemic has stopped us from doing a lot of things, home buyers have not been deterred in the least. Not only that, but they’ve bought more homes than before, and at higher prices. So, it’s safe to say that the real estate market isn’t going anywhere. What has changed is the process.
I bet you never thought you’d buy a home you’ve never seen in person or that hasn’t been inspected thoroughly, but that might just be something you have to contend with if you’re looking to purchase a property right now. Between the rush to buy and the crazy market, securing a home during a pandemic can be a very distinct, memorable experience.