Affordable Homes Not So Affordable During Pandemic
I recently saw this information on the National Real Estate Post and thought this was very valuable data so I’m sharing it here.
“I’m hearing from a lot of people out there, who are NOT in the mortgage or real estate industry, saying they’re “waiting for prices to come down” before they go look at a home or make any offer. In fact, I’m working with a couple of buyers myself who have this mentality.
I mean don’t get me wrong, I completely understand the thought process behind it. We all remember the last crash in 2008 where home prices fell through the floor. But this is different.
Prices of the most affordable third of US homes jumped 5.5% during the opening months of the COVID-19 pandemic, according to a new report from Redfin. Meanwhile, prices for the most expensive homes rose just 2%.
So, not only are prices still advancing, but it’s entry level homes that are increasing the most.
For those of us asking why this is happening, here’s another quote:
Spending so much time at home during quarantine has made a lot of people realize that it might be time to stop renting a cramped apartment in the city and time to start owning their first single-family home,” said Pam Henderson, a Redfin agent in Dallas. “With mortgage rates at record lows and remote work on the rise, some renters are having an epiphany: They could buy a lower-priced home in the suburbs for close to what they’re paying in rent.
Couple this phenomenon with a lack of housing inventory and you’ve got the recipe for a rise in entry level home prices. But will this continue?
In a recent interview I did with Barry Habib, he feels housing will remain strong, however, we shouldn’t get too excited. He said that we’re still facing insane unemployment, and that it could take some time for the numbers to catch up to reality. But, he still sees housing increasing going forward. You can see it below:
Obviously if a potential home buyer is concerned about their employment, now isn’t the best time to go looking for a home. But for those buyers who are confident in their employment, we need to educate them that the numbers and the sentiment out there is that housing is not only going to continue to do well, it’s probably the main economic factor that’s going to get the country back on track. Simply put, waiting could cost them money, not save them money.”
So, if you’re sitting on the fence waiting for prices to come down, you may want to contact me to get the process started now. You can get hold of me through the Contact page on this website of call me at 562-544-0449.