The “Corona Effect”: Why COVID-19 Will Ultimately Be Good for the Housing Market

Call me crazy, but I believe that in many ways coronavirus will ultimately strengthen the housing market. There is money to be made…real money, and bargains to be had for those who have the courage and insight to enter the marketplace at the right time with the right deal. Right now may just be the right time. Let me elaborate.

If this months-long quarantine has shown us anything, it’s that our homes are truly the center of family life and in times of trouble and uncertainty, it’s our safest, most comfortable and most welcoming retreat. Home is where the heart always is, don’t you agree?

It has become our classroom, our catering kitchen, our technology center, our office, our media center, our craft room, our kids’ playroom, our dormitory, our gym, our conference room, and our places of worship. It has served all these purposes that we once went to other places for. And once this current situation is over, it will not go back completely to the way it was before.

We will find out we like family meals; the ease of working out at home; we won’t miss the commute to the office five or six days a week; and some of us will continue to homeschool our children. In other words, we won’t revert completely to the way we were before, and homes and the housing market will benefit from these changes. So will the real estate professionals that are able to navigate successfully through the storm.

It may take weeks or even months to find that perfect next home for you and your family, but when you’ve done your homework, you will know what that home is when you see it.

All this time at our homes has made many people aware that their home may not be large enough for all the purposes it’s being asked to serve right now and in the future. On top of that, many of us are adding other family members—parents, aunts or uncles, nieces or nephews, or college-age kids we thought had gone for good. Some of us are even procreating. So, we may start thinking about buying a bigger home as part of the lifestyle changes brought on by the covid crisis. Here’s a term to familiarize yourselves with: multi-generational living. It’s here and it’s here to stay.

It’s not ridiculous or out of the realm of reality, although it may be scary in uncertain times.But there are ways to add to that certainty to ensure we are acting rationally before we pull the trigger on buying a new home in these sometimes surrealistic times.  

First thing is, interest rates continue to trend at historic lows with no uptick likely in the foreseeable future. In the last two weeks there has been an uptick in properties going under contract. Inventories remain low, which can work if there is lower demand. 

Let me share what I think are some key steps:

1) Do an honest assessment of your family’s financial situation. Do you still have your job? Does your spouse? Have your salaries been cut? Are they likely to be in the future? How have your investment accounts been affected? Be brutally honest before making any significant move. 

2) What is the real value of my current home? Am I able to rent it and cover the overhead, and if I do can I come up with the down payment for a new purchase? If I need to sell, I need to look at my neighborhood and again, brutal honesty is the key here.  What is it worth and how quickly can it sell? A qualified realtor is your best counselor here. 

3) What is my credit score? If it’s lower than you would need, take the time to find out why and work on improving it.  This can make a big difference with both your ability to get a mortgage as well as your rate. 

4) Can I pre-qualify for a mortgage?  This makes you a better, more appealing buyer and your offer is given more credence.  Remember, everything in the home buying process is taking more time, so plan ahead and start as soon as feasible. Another question, given certain instances would be, can I qualify for TWO mortgages?

So let’s assume you’re employed and you’re likely to stay that way, your credit is good, your current home is a good solid investment and should hold its value on the marketplace; what happens next?

You would be well advised to define what you’re looking for in terms of price, square footage, location, and how much work you’re willing to put into the project.  That is crucial—knowing your parameters and limits. 

If you were a doctor we would call it, ‘watchful waiting,’ and if you were a cat, you’d be ready to pounce.  It’s not a rush.  It’s a waiting game—waiting for that perfect home and the perfect seller.  And the perfect seller is one who needs to unload in this market, and may be desperate.  They’re out there. Don’t just fall in love with a home—fall in love with the right home with the right potential at the right price.

Again, work with a realtor who has access to insider knowledge, coming soon listings and properties that are not on the market yet.  You have a responsibility too—to look at various websites, to drive by listings, to see listings if that’s possible in your area, and be ready to make a move when the right opportunity comes along.  A real sense of urgency will prove to be part of the winning formula.

It may take weeks or even months to find that perfect next home for you and your family, but when you’ve done your homework, you will know what that home is when you see it. Your realtor will either support or veto that decision, and you may be on your way to a great bargain that will serve your family’s needs for decades to come. 


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