By Barbara Lehrer
Real Talk
Barbara Lehrer
This season has been a seller’s market: very low inventory combined with a frenzy of eager buyers. Each client is experiencing a wave of newness; the variables can be a bit overwhelming.
The COVID-19 pandemic slowed things down for a bit in real estate, but interest from both sides is now strong and ongoing. With historically low rates, such as a 3.15 percent on a 30-year fixed rate mortgage at the end of May, sales are up.
The housing supply is tight and therefore homebuyers are paying higher prices to get the fewer homes available. This stream of supply versus demand is increasing the cost to buy. Overall, as homes close for more money, new listings can market for higher prices – thus we have a seller’s market.
There are multiple reasons for the high demand. The normal spring market always brings out buyers. This year, society is reopening and people previously pent-up due to the virus are finding great rates, making for an excellent opportunity to get low mortgage payments. Qualifying for a larger loan equals more buying power, so homes are selling for higher prices. There are also those buyers looking to move into our area to get away from New York City. With prices up and sales up, and a more relaxed atmosphere to actually go inside of homes, now is a great time to sell.
Jumbo loans are the only worry. Banks are feeling the stress of giving out business loans to small corporations during the pandemic, so they then worry about getting their own reimbursements. Buyers worry about their own jobs being threatened by the economic crunch, and whether their large loan could wind up being their last loan. Therefore, higher priced homes still take a little longer to sell.
Buyers who rush to visit new listings with a good preapproval letter are scooping up the deals. Some were even buying without getting inside the property. Just by using a virtual tour, technology has made a clear vision of a home and all its amenities. Our new normal will include careful viewing rules for a long time to come.
In the meantime, we need inventory to keep the economy lively. Sellers can find a new home but usually they need a bite on their current property first. Since rentals are a scarce commodity, timing is the key to moving. As always, get a buyer, put your old home under contract, and write an offer on a new property that fits your needs. Close both homes in a few days: that’s the real estate mantra.
If you need more information on these issues, email Barbara.Lehrer@cbmoves.com.