In most years (and in most parts of the country), summer is the best time for home sellers.
That’s because buyer competition typically accelerates from May through August.
This year, however, the Covid-19 pandemic might have altered that trend.
Could those changes be enough to alter the summer market in favor of home-buyers? For some, the answer might be yes!
Experts are split, but they agree on one thing: No one can say for sure how the market will move in the coming months.
Summer is normally a seller’s market
From Martin’s article:
A recent report by ATTOM Data Solutions had some interesting findings:
- Sellers reap the greatest home sale premiums as the weather warms up
- The months yielding the highest premiums are: June (9.6%); May (8.3%); and July (7.3%). August yields a 6.0% premium
Overall, says ATTOM, home sales completed in May, June, and July usually net 7% to 10% above market value.
That equates to roughly $17,000 to $25,000 extra for sellers.
Judging by the numbers, it would appear that sellers have a solid leg up on buyers in the summer months.
How COVID-19 changes the home buying balance
Martin states “some experts think that the coronavirus could alter the usual summer housing market patterns.”
“Consider that the aforementioned data is based on sales between 2011 and 2019. This year is a hard one to predict for numerous reasons — most of all a pandemic that’s likely to have long-lasting effects.”
“We are in uncharted territory,” says Caleb Liu, a real estate investor and owner of House Simply Sold.
“The longer this pandemic lasts, the more economic damage it may cause. Many sellers may be forced to sell their homes. That means an increased housing supply. And when inventory goes up, prices fall.”
That doesn’t necessarily mean homes will priced to sell quickly.
“But if the pandemic extends into the second half of 2020, I believe prices will start to drop,” says Liu.
“If the pandemic extends into the second half of 2020, I believe prices will start to drop” –Caleb Liu, Owner, House Simply Sold
Real estate attorney Rajeh Saadeh also feels buyers may have more leverage than many expect this summer.
“The economy is still relatively strong. And the buyer pool this year will likely be smaller due to job and income loss. Those factors can help give buyers the advantage,” explains Saadeh.
Remember that mortgage rates have recently dropped to all-time lows. Most experts also predict that this low-rate atmosphere will most likely continue throughout the rest of 2020.
Today is a Good Time to Buy
For buyers with stable employment, good credit, and enough cash for the down payment, closing costs, and mortgage payments, this summer could be an excellent time to make that purchase.
Martin quotes Suzanne Hollander, a Florida International University real estate faculty and attorney:
“Interest rates remain enticingly low,” says Hollander. “And if you live in a condo or apartment with common areas and are worried about coronavirus risks, a detached single-family home with your own yard might be just the place for you.”
You can check out another article here on the opportunity that’s presented itself in the housing market during the last few months.
“When the coronavirus pandemic subsides, home prices could very well be higher, and financing could be harder to come by, so buyers should try to find deals now, if they are able.”
Now really is a good time to act, if you are able. Do reach out to me if you would like some help with financing or to talk strategy this summer – as it would be my pleasure to help!