How the Coronavirus Will Affect Real Estate And What You Can Do About It4/14/2020
With the coronavirus hanging above us, a global, economic shut down, and unemployment skyrocketing, it makes a lot of people wondering whether or not real estate is such a hot commodity still. While no one has a crystal ball showing what the future might hold, the reality is that the real estate market is still moving, almost unabated because of the virus.
Does that mean you should go out and head into every open house you can possibly find? Not quite, but one thing is for certain: real estate will be forever changed.
My name is Isai Diego, and I’ll be telling you how COVID-19 is affecting the real estate market, and what you can do about it.
- Interest Rates
- The interest rate was already low, for a long time, and despite the cut at the Federal Reserve, the interest rate had the opposite effect. It wasn’t because of bad policy making, but because the banks needed time to know what to do with such policies, creating a cloud of doubt. Interest rates, however, are expected to come down lower than before, and lower than anyone could have ever dreamed of getting when financing their home.
- Does this mean you should go on a shopping spree? Probably not. The surge of interest rates has finally come over the peak it seems, and the interest rate is coming down, definitely the lowest rates we have had our lenders lock in a really long time, maybe even ever.
- Inventory and Pricing
- If you’re were hoping to buy before, and you’re still working, albeit at home, then now is the time to buy. Property prices have seemed to stop increasing, and better yet, the interest rate is finally starting to see the benefit of the Feds moving the interest rate down to its bare minimum.
- What does this mean? This means that you’re going to see rock bottom interest rates and great buying opportunities for prices. Now, more than ever, is the best time to be buying real estate. But what about selling?
- If you are currently selling, or are hoping to sell, again, no one has a crystal ball, as far as what’s going to happen to prices. For now, like I just stated, prices have stabilized, meaning they’re not going up, but they’re not going down either. Any equity you’ve made since 2012 is probably not going to go anywhere, depending on your location or financing terms.
- Should you wait or take action now? That’s all up to you. If you absolutely need to sell, then sell away! Properties are still moving, escrows are still closing, and buyers are still looking. What makes selling great today is that it has never been easier. With Virtual Reality, virtual tours, and carefully done photography and marketing, the only person that might ever step inside the home is the serious buyer. No more having to host Lookie-Lou’s.
- Viewings and Showings
- Speaking of Lookie Lou’s, it has never been easier to view a home. MatterPort, VR, personal video tours, and great photography is the signature of a great listing agent, and that means that if you’re serious about a property, you’ll be able to see every little nook and cranny long before you ever step foot inside, making it easy to see whether or not actually visiting the property is worth leaving home.
- This is great news for those of us that have long been wanting this to be more wide spread. Virtual tours and the like will most likely be a standard practice among listing agents, making it better for you, the buyer, to see whether or not a home is worth the visit.
- If you haven’t been prequalified yet, that’s one of the first steps you should take before you start looking, in order to ensure that you have
- Rentals and Forbearance
- If you’re currently making any rental income, the pandemic will definitely create some long-term issues if your bank isn’t allowing forbearance. If this is currently your situation, your best first step is to call your bank and ask. If you were thinking of getting into rental properties, I would take action sooner than later.
- Rock bottom interest rates, the best selection of renter applications with (obviously) stable income, and stable pricing has made today the best time to get into real estate investing. If you’re able to get in with no mortgage insurance, then you’re in luck. No new investor will have a better starting ROI than those who take action today with no PMI.
We’re still not sure where this global pandemic will take us, and we won’t know what the effects are going to be in the long run, but it’s being guessed by top experts around the world that the Real Estate market, after this Safer-At-Home order, will be stronger than ever. If you’ve been on the fence for a long time, and you’re able to do so, despite the state order, buying today will be among the best decisions in your life.