The Covid-19 pandemic has brought an influx of change this year – specifically with trends directly impacting the real estate market.
The residential real estate market was tight, with deficient supply and demand peaking near an all-time high. However, as the virus began to spread, supply plummeted as sellers pulled homes off the market and others wavered in listing them.
With unemployment on the rise, many states allowed mortgage payments to be suspended – meanwhile, access to mortgage credit tightened up.
Eventually, supply and demand began to rise slowly across the country, but the question remains: What do these changes mean for potential buyers and sellers?
With more time spent at home, Californians have altered house buying behavior drastically this year. Many potential buyers are now working remotely and find themselves prioritizing the need for extra rooms and office space and prefer living in suburban communities.
Remote work has turned long commuting times into a thing of the past. Due to this change, many buyers are more interested in acquiring a larger home or temporarily relocating to a more desirable location. This trend has become an increasingly alluring option as rising health concerns have people itching to get out of congested urban areas.
When interest rates are low, it translates to more buying power – Buying power refers to the ability to get more home value for the same budget. In addition, lower rates have driven first-time buyers to the highest level in 10 years. As far as mortgage loans are concerned, the cost of paying interest is factored into your monthly mortgage payment and can have a major effect on your housing budget. With interest rates at record lows, the prospect of a larger, secluded home is more accessible because your money will be stretched a lot farther.
While this makes buying enticing, it is also the ideal time to sell. Supply for homes is lower than the demand, so current market competition is soaring with a higher average of multiple offers coming in for the same listing. Due to this trend, many properties are actually sold above their asking price. This pattern is reflected in many California markets, for example, listings in Los Angeles were down 17.5% as compared to last week. In San Diego, they’re 33% lower, and in Sacramento, the listings dropped 37.2%. This showcases that the California housing market will continue its economic recovery following the coronavirus pandemic.
If you are ready to buy and have any questions, please feel free to contact us so we may assist you. You can also visit our website to research more topics pertaining to the current mortgage market.