In early 2020, just before the Coronavirus outbreak, the sale of existing homes was the best they'd been since 2007.
Unfortunately, the housing market nor anyone else saw COVID-19 and the impact it would have to come. The virus has changed the way of life for the entire globe, forcing many people to stay in their homes for months on end. Those that didn't lose their jobs began working from home in many cases, and plans for public outings have been put on the backburner indefinitely.
Buying and selling property is a necessity that won't disappear anytime soon, virus or not. However, the market has certainly taken a hit and home buyers, sellers, lenders, and realtors are actively looking for ways to work around the pandemic.
If you're in the market for a home this year, here's what you need to know.
Impact Of COVID-19 On Home Buyers
The Coronavirus has affected multiple factors in the housing market, including but not limited to:
As a result of lockdowns and quarantines across the United States, over 36 million Americans have lost their jobs or at least some of their earning capacity due to COVID-19 and have filed unemployment claims, according to the New York Times.
Harvard Business Review reports that the economic fallout of the coronavirus pandemic is now spreading "as fast as the disease itself" and social distancing measures that need to be taken to reduce the spread of the virus also choke out economic activity, creating a different kind of problem.
Since consumer confidence in the housing market is directly tied to the performance of the job market and the economy as a whole, natural trust in the housing sector has begun to wane. Fewer people are deciding to sell their homes, and fewer people are deciding to take on the financial responsibility of becoming a homeowner.
Availability of homes
Even though the number of home buyers has decreased, there are still more buyers than there are properties available for sale. This means that there are fewer properties in your area to choose from, and new listing updates are less frequent.
Quality homes at a good price won't stay on the market long, but fixer-uppers might take months to sell because fewer buyers are willing to take on the additional financial burden of renovating a home.
Virtual transactions are beginning to become the norm for businesses across the country, including financial institutions and real estate agents. As companies and individuals work to decrease the spread of the Coronavirus, that means putting radical social distancing policies into place.
In the past, it was preferable for buyers and sellers to meet in person and for buyers to have the opportunity to walk through the home and check things like faucets, toilets, and electrical wiring. While this is still the best way to identify potential issues with a home, it's just not possible now without incurring unnecessary risk.
Housing Markets In Virginia, Utah, And Texas
Virginia Business reports that new home listings are down by about 35% in Northern Virginia. Fewer homes are going up on the market and some homeowners are taking their houses off the market during the pandemic. However, there are more buyers, and home prices have gone up by 9.2% from last year, from $597,000 to $652,000.
Utah Real Estate reports that the pandemic hasn't slowed down the state's normally fast-paced housing market. Home listings are down by nearly 23% from May 2019, but like in other areas, the average sale price of homes has risen. Mortgage rates continue to trend downward, making homeownership in Utah possible despite the pandemic.
The Texas Tribune reports that the housing market in the state is slowing down as a result of COVID-19 concerns. Home showings are now done almost exclusively virtually, and new construction permits are expected to decrease despite Texas leading the way in years past.
The decrease in oil prices has had a significant impact on Texas' economy as well, which may be playing a role in the impacts on the housing market here that aren't being seen as much in other states.
What Should Home Buyers Expect In 2020?
Homebuyers should expect transactions to look a little differently than they did before the pandemic. Aside from the changes to the financial and housing market, the process of getting a home loan and buying property has changed to comply with social distancing.
Homes for sale may only be available to view online via photos or a 360-degree virtual tour, and actual open houses will be few and far in between. You may meet with the seller or your financial institution via video conference, and you may be asked to electronically sign paperwork instead of putting pen to paper.
Securing A House Loan With Chartway
If you're shopping for a new home this year or even just considering the possibility, you should be working with a mortgage lender you can trust. At Chartway, we're staying on top of the current housing market trends in your area and offering smart mortgage loan products that are tailored to suit your needs.
We've also made several changes to the way we do business, incorporating virtual communication where possible, and taking additional safety precautions to reduce the spread of Coronavirus at our branch locations.
Ready to make 2020 the year you buy a new home?
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