The COVID-19 global pandemic has altered a lot of things in the lives of many people whether you are paying rent, paying mortgage, selling a house, or buying a new one. Prior decisions have been changed and new lifestyles are being practiced.
While people are in quarantine and social distancing is in place, in-person home viewings are prohibited and offices are closed—which is why people are delaying their plans on buying new homes. They rather stay where they currently are and wait until the health crisis has subsided.
But there are still those who are buying new properties, selling their homes, or signing new rental contracts. Despite the current economic distraught brought about by the coronavirus scare, experts are still looking forward to a thriving real estate market—there will be changes in the buying, the selling, renting and new construction.
These are the changes to happen in 2020 according to experts:
- Changes to see in buying
Economists predict that the home buying will remain healthy for the whole year of 2020 based on how strong it started in January, while mortgage interest rates are fairly low—although they also predicted a recession to happen in mid 2021.
Along with the closing of businesses and other establishments, lenders made an effort to somehow offset the effects of the virus scare by lowering the mortgage rates. When Freddie Mac reported on March 4 that the 30-year fixed-rate mortgage interest rate has dropped to a record low of 3.29%, many potential buyers have flocked to apply for mortgage and other homeowners for possible refinance.
However, the low interest rates have been unable to sustain the buying activity in the market and it has dropped dramatically. It could be due to the stay-at-home orders or many job losses and employment issues—or both. According to a survey by the National Association of Realtors, the decrease of the homebuyer interest is due to the virus outbreak.
But the market has grown resilient, and in no way the virus can stop the business. Taking the example from SARS pandemic in 2002, the housing market activity in China was then limited just the same as how it is happening now in the U.S. But in the long run, the housing market in general, won’t be affected significantly.
How much impact the current health crisis will have on the market will depend on how long it gets contained by the government and things go back to their normal state. The longer it drags on, the larger the possibility for a recession due to limited movement resulting to less productivity.
- Changes to see in selling
Just as how homebuyer activity has decreased dramatically, sellers have also decided to postpone selling their homes in order to abide by the social distancing order. But, there are those who do not have the luxury of time to wait. So to continue doing business even if the movement is limited, realtors decided to resort to video chat tours, and other virtual technology to keep it going.
In the last week of March, the use of remote virtual home tours have dramatically increased. This means people are still interested in home buying and taking time to look for houses, touring houses virtually, so they could either buy it now or as soon as the quarantine ends.
One of the greatest challenges now is how to keep the houses for sale not stay too long in the market. Real estate listing agents are making sure that the properties are priced appropriately so they have a better chance of getting purchased.
What happens to home sellers, just like the home buyers, still largely depends on the duration of the pandemic. We may be seeing an increase in homes for sale once the pandemic has ended.
- Changes to see in renting
Renters are mostly the working class in service industries and hourly jobs. They are one of the most affected by the closing of the businesses, or with the reduced working hours, while others just totally lost their jobs.
Many of the first-time homebuyers are stuck to being renters for now because of what happened. That means the demand will certainly rise as soon as the health crisis ends.
Both the government and the landlords are giving rent relief to their tenants especially those who are either ill or have lost their jobs. The U.S. Department of Housing and Urban Development even prohibits eviction for the meantime.
If unemployment becomes a prolonged issue in the aftermath of the pandemic, landlords can expect the government to impose regulations further to help tenants get back up on their feet.
- Changes to see in new construction and development
The policies vary from state to state in terms of construction and it can result in different outcomes of new housing availability immediately after the pandemic ends.
Many states have totally stopped construction, while others consider residential construction essential and so the work still continues. But their workers have been worried because construction tasks require them to work close together.
If stay-at-home order lasts longer, we may be seeing a shortage of labor force as workers may tend to find other jobs elsewhere to keep putting food on their families’ tables.
If you don’t have the luxury of time to wait for your house to be sold or let it sit in the market until the pandemic is over, you have another option. There are real estate investors who are still in business and would love to buy your house. Just make sure to find a reputable “We buy houses Los Angeles” company just like Mrs. Property Solutions. They’ve been in the industry for years and they are taking this opportunity to help out people who needs to sell my house for cash Los Angeles
