COVID real estate market swings in sellers’ favor; buyers shouldn’t be discouraged
CHRISTIANSBURG, Va. (WDBJ) - The COVID-19 pandemic affected every industry, including real estate. Many sellers took their homes off the market because people were in lockdown and no one wanted strangers in their homes.
Samantha Livesay, a Montgomery County realtor, also said there weren’t as many homes for sale, as many people changed their minds about selling.
“So what that did was cause the supply to go down,” she explained.
But then there were also more families working from home and realizing they needed more space or could change locations.
“So the demand escalated,” she said.
The increased demand plus the low supply has created a classic sellers’ market, where people selling their homes are almost guaranteed to get at or above asking price.
“The folks that were looking for a home to purchase are finding themselves in these bidding wars, which is causing home prices to escalate,” Livesay said.
And most homes are moving fast.
“We’re seeing homes on the market for less than 24 hours with over 20-30 showings on a home and multiple offers on a home,” Livesay said. “So if you are a seller, it’s a great time to put that house on the market.”
And that’s not just the trend locally, but nationally, as well.
“The resources that I’m seeing say that this trend is going to stay for awhile,” she said, explaining there are also historically low interest rates. “Interest rates may increase, but they’re not going to increase so fast that the housing market is just going to crash overnight.”
Even if rates increase by a percentage or two, they’ll still be really low, which will continue to help home buyers and sellers.
No matter the time of year or market conditions, actually purchasing a house can be an intimidating task.
“This is the biggest financial decision you’re ever going to make.”
Livesay is not only a realtor; she’s also the community relations coordinator for the non-profit CHP Homeownership.
“Our mission is to create homeowners that are competitive and sustainable,” she said.
The organization helps homeowners navigate the real estate market. And in today’s sellers’ market, the stakes are even higher when trying to purchase a home, but there are things you can do to ease the process.
“We want to make sure that you have that pre-approval in hand,” Livesay said.
The last thing you want is to find your dream home, only to have it be sold to someone else because you had to wait for the bank to approve your loan.
“Get that pre-approval in hand and really understand your affordability, so that when a house comes on the market, you already know what to offer and you’re already comfortable going over asking, as that is exactly what we’re seeing with a lot of homes,” she explained.
Escalation clauses are also becoming more popular in the fast-paced market.
“For example, if you offer $100,000, you are also going to say that you’re going to pay no more than $130,000 if multiple offers come in,” she said.
And finally, writing a letter to the homeowner can also help you stand apart.
“This allows a personal touch. It pulls at the heartstrings. And we have seen folks that have gotten their home at a lower price because of that personal letter.”
CHP Homeownership is offering a free online class Tuesday, May 4 called “Navigating the COVID Real Estate Market.”
Experts at CHP will talk about assessing your current financial situation, shopping for a mortgage, the steps of buying or selling a home and an overall market analysis of the New River Valley.
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