What will happen once the Corona Virus curved is flattened here in the US? No one is sure but I see that China appears to have opened many factories and has weathered the storm. Assuming we all stay at home and the health care specialists can "flatten the curve", what's the next step?
Likely in a few weeks, or a few months, there will be some pent-up demand from home buyers and some sellers that are waiting to sell their home.
Probably there will be a small portion of home sellers that want to sell ASAP. and buyers that want to buy ASAP. And speculators and investors that are looking for "desperate" sellers. This may be 10-15% of the market. For those of us that are looking for a 5-10 year horizon, now might be the right time to buy. The Fed has said they will employ a monetary policy to allow mortgage rates tied to the T-bill to stay low.
Why waiting to buy may not be a good idea
I am seeing most homeowners with hundreds of thousands of dollars in equity. (Who cares, good for them, right?)
The reason "sellers having equity" is relevant is homeowners with equity don't walk away from homes.
All of the homeowners in the last 12 years, since the great recession, had a downpayment, a job, and good credit. Since then the home values have been rising for 5-10% per year. That means they are worth 30-50% more than what the owners bought them for.
At the same time, most people are on fully amortized, fixed-rate loans, so the loan has been paid down every year.
If your home bought 10 years ago is worth hundreds of thousands of dollars more and your loan is getting paid down, why would you sell it for less than it's worth?
You have options as a home seller to rent it, refinance it, move-in, and more. So I am seeing more homeowners pull their homes off the market versus, taking a low offer. Also, there are not enough new homes for buyers and they are generally 33% higher than similar resale homes.
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Likely in a few weeks, or a few months, there will be some pent-up demand from home buyers and some sellers that are waiting to sell their home.
Probably there will be a small portion of home sellers that want to sell ASAP. and buyers that want to buy ASAP. And speculators and investors that are looking for "desperate" sellers. This may be 10-15% of the market. For those of us that are looking for a 5-10 year horizon, now might be the right time to buy. The Fed has said they will employ a monetary policy to allow mortgage rates tied to the T-bill to stay low.
Why waiting to buy may not be a good idea
I am seeing most homeowners with hundreds of thousands of dollars in equity. (Who cares, good for them, right?)
The reason "sellers having equity" is relevant is homeowners with equity don't walk away from homes.
All of the homeowners in the last 12 years, since the great recession, had a downpayment, a job, and good credit. Since then the home values have been rising for 5-10% per year. That means they are worth 30-50% more than what the owners bought them for.
At the same time, most people are on fully amortized, fixed-rate loans, so the loan has been paid down every year.
If your home bought 10 years ago is worth hundreds of thousands of dollars more and your loan is getting paid down, why would you sell it for less than it's worth?
You have options as a home seller to rent it, refinance it, move-in, and more. So I am seeing more homeowners pull their homes off the market versus, taking a low offer. Also, there are not enough new homes for buyers and they are generally 33% higher than similar resale homes.
Find Out What Your Home is Worth
Search for homes
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