Coronavirus 2020 – Why Now Is a Great Time to Buy a Home
With the economy slowly coming out of a slump caused by record unemployment and social distancing, many economists expected the U.S. housing market to dip significantly during the pandemic. Before March of this year, the housing market was incredibly strong; during the end of 2019 and the first two months of 2020, buying activity was at the highest level it’s been since the recession of 2008. This successful market was expected to see a drop in sales for residential real estate since our nation went under lockdown, but in many parts of the country, demand held steady or even saw a slight rise. How can this be?
Several factors have worked together to keep the housing market robust and demand strong. One of the most important reasons buyers are still active is the continuation of attractive interest rates. Historically low rates remain in effect, encouraging buyers to lock in lower monthly payments by financing their new home now. This is especially true for renters, who have been at the mercy of steadily rising monthly rents for several years. Renters may also be reconsidering apartment living, with its closer proximity to neighbors and shared facilities such as laundry areas, swimming pools, playgrounds and mail rooms. In this time of social distancing, single family homes with yards hold extra appeal to many families.
Social distancing recommendations are also encouraging those who live in larger cities to consider smaller cities or suburban living, where there is less crowding. It’s also a bonus that the properties available in these less populous areas tend to have a lower price tag than major city properties, even if they are almost twice the size.
It’s also important to note that many of the federal relief programs available to Americans through coronavirus legislation are more significant for homeowners than for renters. Renters are definitely at a disadvantage here, as a larger percentage of renters tend to have jobs disproportionately affected by the recent lockdown. It’s more likely that hospitality, retail, leisure and service sector workers are renters rather than homeowners. As these workers lose their jobs or suffer a reduction in income, rent becomes more and more unaffordable, causing displacement of these affected workers. Many will move in with family members or friends, while assistance from federal programs can help homeowners stay afloat.
While there is some lingering anxiety over employment security and the economy in general, the reopening of the country is creating a renewed sense of optimism. While some potential buyers are delaying their search for a new home, those who have assessed their financial situation and feel secure enough to purchase at this time can find they have less competition for the home they want. While home prices on the whole have stayed steady, unlike the common price drops during most other times of economic uncertainty, there may be fewer buyers in the market overall, giving those who are ready to buy more options.
And surprisingly enough, there may be a silver lining for those workers receiving unemployment during the coronavirus pandemic – the increased income they receive through state payments and the additional $600 per week received through federal supplements could very well be significantly more than they would get while working. This extra income is often finding its way into a downpayment fund, opening up a whole new world of future homeownership.
Buyers are also often surprised to find that homebuilders have made important changes to the way they show homes and handle the sales process. The focus now is often on virtual tours conducted online or one-on-one appointments designed to minimize exposure to the virus. Many in-person meetings have been done via platforms such as Zoom, Google Hangouts, Skype, Facebook Messenger Rooms or other audio/video services. The extra security measures that protect both buyers and sellers have encouraged many families ready to buy to use this less hectic time to search for the perfect home.
At Ernest Homes, we’re working closely with our customers to match each one with the perfect home during this historical time. As an essential business, we’re keeping both our doors and our digital communications open to better serve our customers and our communities. Don’t hesitate to call us at 912-660-9673 or send us a message via our website. We’re always here to answer your questions!