Is Now a Good Time to Buy or Sell?Posted on Jun 17, 2020
Important Factors That Buyers and Sellers Should Consider
It's no secret; the housing market this Spring has been anything but normal. What traditionally represents the busiest time of year for buying and selling has been turned on its end by COVID-19 and the resulting uncertainties.
Concerns over people entering homes and job security, combined with record-low interest rates (but tighter-than-normal credit restrictions) and a growing number of borrowers are filing forbearance requests is resulting in a real estate landscape quite unlike anything we've seen in recent times.
Despite the ever-changing lending landscape challenges, one thing that is extremely apparent this buying season is that there’s a ton of pent-up demand. Some conventional wisdom market timing remains true, but there are certainly new factors for home shoppers to consider.
The good news? Even though talks of a recession are almost unavoidable, it's important to note the differences between the Great Recession and the times we're currently living through.
Housing Outlook 2020
New reports on the housing market predict that the recovery is likely to take the form of a flying W. Both Realtor.com and Haus forecast a W-shaped path forward. More specifically, an initial sharp drop this spring, a noticeable rebound in the summer followed by another dip in the fall, and finally, a more stable path to recovery by the spring of 2021.
Many buyers that had made the decision to sell and buy this spring represent pent-up demand that is being released as the economy starts to open up. Once that pent-up demand has been satisfied, a more steady state of demand will present itself. Signs point to this level being lower than it has been over the last six/seven years, so expect a drop in the fall after most of the repercussions from this pandemic have started to fade.
Another reason to suspect a flying W shaped recovery is that there is always the potential for COVID-19 to reemerge in the fall. Obviously, this would likely lead to another noticeable drop in the housing market before a full recovery by the following year.
National vs. regional level
The answer to the question of whether or not to buy a home and how to correctly time the market looks different at the regional level compared to the national level. Every region is unique.
The most obvious difference right now is the disproportionate impact on housing markets in the areas hardest hit by the pandemic. States like Florida and Nevada that are reliant on tourism have been particularly affected.
For other markets, like the Denver metro, the outlook for the housing market looks fairly stable. Denver and the entire metro area remain a seller’s market, with lower levels of inventory, and prices expected to rise 2 to 3% through the end of the year.
Considerations as a Buyer
Ultimately, when it comes to whether or not you should buy a home right now, the answer depends on your circumstances.
For starters, if you're looking for the perfect home, chances are slim you'll find EXACTLY what you want. After all, if you’re trying to get your dream home, you want to see as many homes as possible in order to best match your wants. With low levels of inventory, you might not be afforded that chance.
The one factor that many buyers look at – prices – are still sitting at record highs. Forecasting is not predicting national price declines beyond a slight dip this spring.
Overall, now is the time for confidence. Make strong, well-informed choices and execute. When the rebound comes, and it will, make sure you are at the head of the pack. Partner with a professional agent in making your decision so that they can help you determine the true market value of homes you are considering. Your agent could be privy to things happening within those neighborhoods that can help you formulate a stronger offer.
As previously stated, pent-up buyer demand is there, and at least in the Denver market, sellers are still very much in the driver's seat. Even though local listing volume has increased over the past month, there's still nowhere near enough active listings to meet the current buyer demand. According to market reports, the number of pending home contracts in the metro area skyrocketed in May, a strong indicator of recovery from statewide stay-at-home orders that affected showings.
In short, if you were on the fence about listing, know that now is most certainly still a good time to sell. As closures, lending requirements, and stay-at-home orders relax and the economy begins its rebound, expect heated buyer interest to increase even further over the coming weeks.
Questions? Feel free to reach out! Team Lassen understands the trust it takes when selecting someone to buy or sell a home, which is why we are proud to offer our expertise as well as a serious passion for real estate. We're happy to discuss if making the decision to buy or sell makes sense for your goals in the current market. We'll be there for you every step of the way!