The current turbulent economic and social environment has changed how many Americans spend their time and money; that’s a fact. However, this doesn’t mean you can’t have the home you’ve always wanted. Whether you’ve been simply entertaining the idea of buying a home or are already 100% sure, it’s worth understanding why buying a home in 2020 is still a very real possibility.
Below are three solid reasons why now is still a good time to buy. We also offer four recommendations to ensure that you position yourself for success, starting today.
Lower Demand for Homes
Past homebuying seasons were marked by competitive demands for homes, with some real estate markets witnessing bidding wars.
As of April 2020, however, homebuying demand is much lower than in past years at this time.
According to Lawrence Yun, chief economist for the National Association of REALTORS ® (NAR), “The coronavirus is leading to fewer home buyers searching in the marketplace, as well as some listings being delayed”.
This is great news for buyers who are ready to purchase or were planning to purchase around this time.
However, this low demand won’t last forever. Yun says, “the temporary softening of the real estate market will likely be followed by a strong rebound, once the quarantine is lifted.”
This atmosphere of lower competition means it’s a perfect opportunity to purchase the home you want and that’s right for you. In addition to lower demand, the entire marketplace has shifted to one that favors buyers.
It’s a Buyer’s Market and More Sellers Are Willing to Negotiate
Sellers who list their homes on the market typically don’t like listing them for long periods of time, especially if that home is their primary residence and they want to move to a new home fast. This may mean that the seller is willing to negotiate on the final price.
This unprecedented combination of lower demand and a better negotiate position tilts the market toward buyers.
“This is the best buyer’s market I have ever seen in my career,” comments Ryan Serhant of Nest Seekers and the popular Bravo show Million Dollar Listing New York. “Sellers are nervous, there’s excess supply, and interest rates have been hovering at historic lows.” His advice to buyers? “You can own a home for less per month than you can rent an equivalent property in most areas.”
Home Tours Go Virtual
With many people being ordered to stay-at-home, in-person home tours have been canceled or drastically scaled back. Does that mean you’ll never get the inside scoop on a home? Not at all! Start looking into virtual home tours.
“Buyer and seller consultations have transitioned to virtual meetings with success,” says Real Estate Agent Kate Ziegler.
When you get to the visual inspection stage of the homebuying process, you can ask your Agent for as much documentation as you need in order to make your final decision. They’ll be more than happy to send you everything you need.
Virtual tours (such as video and 3D detail) along with pictures of the home’s interior and exterior will allow you to examine, in detail, the home’s appearance and review it during the course of your decision-making.
How to Capitalize on the Current Market
There are three important elements that will help make you make the strongest candidate for your upcoming home purchase. Follow these steps to put yourself in a great buying position when the time comes.
Research the Market in Which You Want to Live
Research the area in which you plan on buying a home. That way, you’ll be able to choose a good negotiation price as well as discover if the area fits your lifestyle goals. Keep in mind that even in a specific area, different ZIP codes will have differing property values. Keep your search as geographically focused as possible to arrive at a general range.
Consider Your Homeownership Goals
To ensure you make the most out of your purchase, it’s best to think long-term. As a general rule of thumb, it takes anywhere from five to ten years on average for a homebuyer to break even on the money they spent for the home purchase itself.
What do you want to achieve from homeownership? A place to expand your family? An asset in which you will build equity? A location where you can be closer to loved ones? Clarifying your reasons for homeownership, and the aspects of owning a home that you value, will give you a target to aim for throughout the loan process. That clarity can also extend to first couple of years if homeownership don’t seem to be yielding an instant return on your original time and effort.
Ensure You’re Financially Comfortable
In this uncertain time, you may have less financial stability than before. However, if you have been preparing to buy and you have enough cash reserves, you may be in a great financial position to buy.
Even in these uncertain times, the rules for a good start to homeownership still apply. Have enough for your down payment and closing costs. Have two years’ worth of employment records. Have a credit score that works for the loan program you’re applying for. These things will be much clearer to you once you meet your Mortgage Loan Originator for a pre-approval.
Get Pre-Approved by a Mortgage Loan Originator
Pre-approval provides you with concrete and actionable knowledge on what your homebuying budget is. Also, and most importantly, it gives you an idea of what loan options make the most sense for you.
When you meet with a Homebridge Mortgage Loan Originator, they will run your credit profile and income to calculate how much home you can afford.
After pre-approval, you’ll then meet with your Agent. If you don’t have one, your Mortgage Loan Originator will recommend one. Then, it’s off to go look for your dream home!
Download your pre-approval checklist here to ensure you’re ready.
Conclusion: Buying a Home Is Still a Possibility, With the Right Actions
Even in the midst of a challenging environment, buying a home is still a great opportunity. With a lower demand for homes, increased seller flexibility, the possibility of virtual home tours and all of it within a buyer’s market, this could be the perfect time to get the home of your dreams.
Be prepared by researching the area you’re interested in, considering your goals for owning a home, ensuring that you’re financially ready and getting pre-approved by a Mortgage Loan Originator.
If you take all of these things into consideration and follow these steps, you may have a new home by the middle or end of summer, when activity is expected to pick back up.
If you’re ready to act in this opportune time, fill out the form below and a Mortgage Loan Originator will reach out to you shortly.