Shop for a home now or wait for a better deal?
Call it the coronavirus conundrum: Is it better to wait things out for a while or jump on the opportunity to lock in a near-record-low mortgage rate and possibly claim a home for less right now?
That’s the question many prospective purchasers are facing lately. And the right answer isn’t always easy to reach. That’s because COVID-19 has created a lot of ambiguity in the economy and real estate market. From job uncertainty to buyer’s remorse fears (interest rates and home prices could, after all, drop lower as pandemic problems persist), house hunters have a lot of concerns — despite any eagerness to buy soon.
On the plus side, buying now may yield a great bargain.
“Mortgage rates are currently lower than at any time in my 35 years of real estate,” says Jeffrey Roberts, chief vision officer for The Roberts Group Real Estate, LLC, a real estate brokerage in Stamford, Connecticut. “And many buyers, including first-time purchasers, should see an attractive market developing in many regions. Properties at the lower end of the price spectrum should offer opportunities that yield excellent value.”
Additionally, there will likely be fewer rivals vying for the same property, considering that the pandemic has caused many people to postpone a property search, and mass layoffs have removed many buyer candidates from the purchasing pool.
“There may also be more homes to choose from now because of previous buyers backing out due to job loss or loan changes. Sellers may be more anxious to accept an offer if they know you’re qualified for financing, and they can reduce the number of potentially infectious people traipsing through their home,” says Margaret Rome, broker/ owner of Baltimore-based Homerome Realty.
Plus, adds, Rome, “with kids out of school for the summer, it’s easier to move right now — especially out of state.”
Perhaps most importantly, sellers are increasingly motivated to work with buyers, agree to concessions, and/or lower prices than they were before, notes Luisa Tancredi, a real estate agent with Triplemint in New York City.
But therein lies a risk — that increased unemployment and other factors will result in even lower asking prices weeks or months from now, as well as an increase in homes for sale to choose from as economically challenged owners will be forced to list their properties.
There’s also the chance that mortgage rates plunge even further later in the year.
“Economists and financial experts seem to believe rates will move lower. However, marginally lower rates will typically only change your mortgage payment by tens of dollars instead of hundreds,” Roberts explains.
Many experts believe the time to buy is now — if you can afford the down payment required, enjoy a secure job and relative financial stability, and are tired of throwing money away on rent.
“The reason to wait is if you or a family member can’t make a firm decision about moving or you have an existing home to sell and you’re worried about finding a buyer for it in this market,” Rome says.
It may also be an opportune time to purchase “if you’re looking to escape densely populated urban cities for suburban communities due to pandemic concerns,” says Steven Seigel, Realtor with Compass Real Estate in Fort Lauderdale, Florida. He says that if the coronavirus never happened, “I’d be more inclined to recommend my clients buy now.”
Tancredi notes that first-time buyers are particularly good candidates to claim a home this summer, as are shoppers seeking a forever home and investors who plan to hold onto a property for a few years, long after pandemic-related issues are resolved.
If you plan on searching and buying soon, prepare for delays and inconveniences.
“Showings will not be as easy to schedule and coordinate. Strict adherence to social distancing and appropriate coronavirus hygiene protocols during tours will be demanded of all parties. And mortgage approvals, property inspections, and closings could take longer,” Roberts cautions.