It’s easy to fall into the romanticism of buying your first home, but it’s not that romantic during the COVID-19 pandemic. Buyers may wake up to the ugly realities of the pandemic market — where bidding wars and record-high prices are real.
There are a lot of reasons why people are suddenly looking for homes during the pandemic. Some of them have seen the benefits of working from home and may be looking for extra space to make the shift permanent. Others may be looking for homes with wider spaces that will allow extra ventilation and more airflow. Whatever their reasons are, it’s enough to make them try to secure an FHA loan.
Things were certainly different before the coronavirus pandemic, where first-time buyers ruled a significant sector of the property market. If you’re a first-time buyer during this time, here’s what you might run into.
A Cutthroat Market
Buying your home for the first time is a truly exciting prospect, especially since it’s one of the best investments a person can make. The environment, however, has become a veteran buyer’s market; while the pandemic supercharged the market, there is a shortage and first-time buyers might run into problems trying to corner a property.
The bidding wars and record prices might also make it difficult for them to zero in on a property they want. Prices might go up to an amount that’s not fit for a first-time buyer.
Not All Bad News
Even if there is a shortage in the inventory of available homes, 47% of first-time buyers were surprised to know that they had a budget far too larger than they thought. It’s because of mortgage rates which averaged 2.73% during the last week of January.
The problem, however, is that there are those who found out that the money didn’t account for much, however large it was. The prices and bidding wars made sure of that.
Even people with the buying power found that they had to adjust and pick properties that weren’t what they initially wanted. These weren’t located in a place they wanted to. Those who had to stick with buying properties they wanted or were located in places they loved had to shell out more money than they were comfortable spending.
Buying Houses Today May Be More Challenging
Surprisingly enough, even if site visits aren’t allowed and virtual walkthroughs of homes are the only thing that’s permitted, buying houses are part of what is deemed essential services. This is according to the U.S. Department of Homeland Security.
That being said, yes, you can continue to buy, provided that you follow the safety protocols and only visit the houses through an online walkthrough. This is crucial considering that COVID-19 outbreaks are expected to reach a vicious second wave sometime before vaccines can be rolled out.
The decision to buy the house will ultimately end up with you. What’s going to make it additionally difficult is the comfort level of the home seller to part with their property during the pandemic.
The Coronavirus and Home Prices
While the coronavirus is ravaging economies around the world, that doesn’t mean that it’s cornering the world economy. In fact, buyers still cannot easily lowball their way into lowering most home prices. That’s because of a shortage of inventory in the real estate market.
Some home sellers opted to wait for market conditions favorable to them. The others who choose to sell for whatever reason might find that the people who are buying are looking for the best prices. There is also the unnecessary stress added by the restrictions and the concerns of people.
Is It Really a Good Time for House Hunting?
There’s no guarantee that you won’t catch the virus when you visit a property or schedule a site tour. But the real estate industry can’t be faulted for lack of trying and has been adamant in enforcing the protocols set by the authorities concerning the virus.
Agents have already made themselves available online and real estate properties have been uploaded into 3D representations. The same agents are also opened to giving a virtual tour of the property. It’s really up to you whether you want to risk it and see the property for yourself or go virtual, but there’s nothing to suggest that house hunting right now should be canceled.
COVID-19 may have made things more difficult or more interesting, depending on your perspective. It might not look like a buyer’s market in real estate right now, but there are bargains to be had if you’re diligent in searching. Consider your needs to decide whether to get that property or not.