It is an interesting time for home buyers during this condensed summer market. Being quarantined at home for a couple months forced a lot of homeowners and renters to rethink their housing needs. Whether they want more space or a place where they can comfortably work from home, a lot of people are ready and eager to make their moves into new homes.
In this article, we want to look at some of the factors driving this housing demand in an extreme seller’s market. At the same time, we will be talking about things that potential home buyers should know before they sign on the dotted line.
Housing Supply Shortage
It’s no secret that one of the primary factors of this seller’s market is the fact that we are woefully low on housing. There just isn’t enough supply to meet the furious demand. Many homeowners are staying put. Those who do decide to sell now are at a huge advantage. There are some caveats, though. Please check out our previous blog article entitled “Is Now the Ideal Time to Sell Your Home?” for some deeper thoughts on the seller’s perspective in today’s real estate market.
Mortgage Pros and Cons
Mortgage rates have been historically low in 2020 and, in theory, this gives home buyers a lot of buying power. Lower rates mean borrowers can afford bigger home loans, and this contributes to both buyer demand and home price increases. However, it is much harder to qualify for a mortgage loan right now, especially any loans considered “non-conforming.” Lenders are looking to minimize their risks, so the qualification standards are much more stringent. If you are thinking of buying a home in the near future, it is a great idea to get pre-approved for a mortgage (or at least pre-qualified). A mortgage pre-approval letter will give you more clout when making purchase offers.
One really interesting real estate trend that we have seen this summer is buyers making really desperate decisions. A prime example of this is a buyer who is willing to waive a home inspection. In most cases, this is very much ill-advised. Unfortunately, the market is so competitive right now that you may have to make some sacrifices if you really want a particular home. You have to weigh the risks versus the rewards. You want your offer to be as strong as possible and there may be other ways to position yourself ahead of other buyers without having to give up everything. Talk with your real estate agent, get creative and put together purchase offers that benefit both parties as much as possible.
Because of COVID-19 restrictions that minimize the ability to meet in person and conduct home tours, it is more important than ever to utilize technology in your home search. You can efficiently narrow down your choices, take virtual tours and find information that will help you make better buying decisions without having to drive all around town looking at open houses.
The current real estate market is moving quicker than any other we’ve seen in our years in this business. It’s absolutely crazy how just about any home that goes on the market will get offers immediately and is usually sold within days. This is not a time to be indecisive. If you are on the fence, you need to decide what you want to do and come up with a smart plan for how you want to do it. If you are wanting to buy a home, you should act fast without acting recklessly. You may not love your ideal living situation now, but you don’t want to make hasty decisions that leave you stuck in an even worse situation in your new home.
What’s on the Horizon?
In a year like 2020, it’s almost impossible to predict what will become of the real estate market in a few months. It’s hard to predict what will happen next week! Mortgage rates could spike as the economy recovers. We could see a second lockdown in certain markets that will essentially halt production again. We could see housing inventory go up as homeowners currently in mortgage forbearance ultimately have to make up for their skipped mortgage payments.
All we can say for sure is that this is the craziest seller’s market we’ve ever seen and everything is moving faster than we could have ever expected during our summer season. Both buyers and sellers need to act quickly and be decisive to avoid getting swept up in this unique whirlwind of frantic real estate activity.
If you are thinking about buying or selling a home soon, talk with The Cyr Team and get your moving plan in order. We’ll help you make smart decisions and navigate these fast-moving market conditions. Contact us today to schedule a no-obligation real estate consultation.