When the coronavirus hit the states in early spring, the economy experienced some major shock waves. With mortgage rates already low, aspiring home buyers were suddenly sidelined as many sellers pulled their listings off the market. Suddenly the question on everyone’s mind was, “is now a good time to buy?”
While no one ever thought this partial shutdown would continue through the summer, and potentially into next school year, what we do know is the current recession is nothing like the one we experienced during 2008. Instead of the market being overrun with too many houses for sale, inventory is low, and there’s little budging on the prices.
So, if unemployment is down and the economy is on the decline, why are there still so few homes for sale? Why are home prices not declining?
The Housing Market is Driving the Economy
With businesses continuing with their modified reopenings throughout the state, experts are still indicating early signs of a much-anticipated economic recovery, which is driving more homebuyers into the housing market this summer. Yes, the economy is still down, but recovery is on the way.
How? The real estate industry.
Today, the housing market is driving the U.S. economy forward. With numerous home buyers looking for houses to purchase and so few available right now, there’s a disconnect between supply and demand. This imbalance is causing housing prices to increase due to multiple offers and bidding wars.
“People are surprised that prices are rising, not falling, because in the last recession home prices fell, the difference this time is the severe shortage of homes for sale…We are seeing bigger price increases with [a limited] number of homes…That is likely to lead to more competition and potentially multiple offers and bidding wars,” said Danielle Hale, chief economist at Realtor.com.
According to the Realtors Confidence Index, the multiple offer trend is growing. On average, there were three offers on a house that closed in May. An increase from two in April.
How to Prepare to Enter the Real Estate Market Today
As consumers continue returning to work, the number of potential homebuyers will continue to increase. If you’re considering buying a new home in Possum Kingdom, there are a few things you can do to prepare yourself before entering the market.
Hire a Possum Kingdom Real Estate Agent
Having a local real estate agent by your side is more important than ever right now. According to a report released by the National Associations of Realtors, 54% of buyers and 62% of sellers indicated that “during the pandemic, a real estate agent’s guidance is especially valued.”
Getting Pre-Approved for a Mortgage
To show that you’re serious about buying a home, work with a lender to get pre-approved for a mortgage before starting your search. A pre-approval will also ensure you’re not looking at houses outside of your price range.
Be Patient and Flexible
While there are still new houses coming on the market every week, not all of them will be what you’re looking for. Be sure to be patient, don’t get frustrated, and be flexible with your agent regarding showings. If you want to see a house, but can’t make it over that day, ask to do a virtual tour to see if it’s worth putting in an offer. You always have your option period.