Here’s Why Housing is Going Strong During Recession | If you’ve been following the news recently, you’ve probably seen many articles discussing how home prices are at all-time highs despite the economy being in a recession. Much of this is due to how the coronavirus pandemic has changed the way people live. With the rise of remote work, many individuals and families are moving out of the suburbs to secure more spacious accommodations.
This sudden shift in the population means that the rate of new home construction hasn’t been sufficient to meet the demand for single-family homes. HomeLight reports in their Top Agent Insights Q4 2020 Report 51.4% of real estate professionals believe a lack of housing inventory is the biggest challenge homebuyers will face in 2021, and 13.7% of agents believe the continuation of low mortgage interest rates (which are currently at historical lows) will also have a significant impact on home sales.
It’s easier to buy a home
Although the coronavirus pandemic has caused homeowners to avoid in-person interactions such as open house events, web conferencing solution such as Zoom, Google Meet, and Facebook Live are enabling homeowners to host virtual open house events, so they can catch the interest of buyers regardless of location and limit in-person showings to serious buyers.
Virtual open house events are relatively easy to host. The real estate agent will share out information about the event and then when the showing occurs, they’ll live stream a walkthrough of your property. During the live stream, prospective buyers can ask questions and receive answers in real-time and also request the agent to home in on specific elements if desired. This is all beneficial if you plan to sell your home “as is.”
While sellers will still likely have to host an in-person showing before closing a deal, virtual walkthroughs are effective at screening buyers who aren’t likely to make an offer.
Competing in a competitive housing market
If you’re a homeowner that’s thinking of relocating, there are a few ways you can edge yourself ahead of the competition when shopping for properties. One of the most effective tips is to hire a buyer’s agent to assist with the home buying process. They’re a real estate agent that represents buyers instead of sellers in a transaction.
Buyer’s agents provide assistance through all stages of the home buying process, from screening properties, negotiating an offer, and more. Buyer’s agents are typically covered from the seller’s agent’s commission, so you don’t have to worry about hefty costs.
Another helpful tip is to get pre-approval for your mortgage. When a lender pre-approves your mortgage application, you’ll know exactly how much you can borrow. Having this information on hand can move you to the front of the line of competing buyers because you won’t have to wait as long to get the capital to pay the seller.
Finally, you’ll want to leverage escalation clauses. These can help you in bidding wars by increasing your offer by a certain amount if another buyer makes an offer that’s higher. For example, you can make an initial offer for $250,000 but then explain you will offer $1,000 over the highest offer up to the amount you choose.