By Tommy Waterworth
There’s still a lot of uncertainty surrounding COVID-19, but we’ve come to find a number of facts about the real estate market during the pandemic. Honestly, the results make sense although the overall outcome sounds surprising. In short, the real estate market is white-hot for sellers and for buyers despite the effects of COVID-19.
Interest rates are at historic all-time lows. Money is essentially free at the moment, and buyers can afford more house than they normally could. Because rates are so good, there is a lot of demand. Which brings us to our current major challenge: Supply.
Supply is low, demand is high
Sellers don’t know where they’re going to move, and as a result, they have anxiety about putting their house on the market. From our perspective, this anxiety and reluctance to list is the majority factor that is keeping inventory lower than it already was. Good looking, well-priced inventory is selling as quickly as it’s listed with multiple offers. Overpriced listings will illicit lower offers but will sell at a reasonable price.
The big winners are the sellers who take the risk of putting their home on the market that can endure moving twice. They capture their equity and can be patient in finding a home in their price range that will appreciate.
The other big winners are new home builders and their buyers. New home builders create their own inventory, and purchasers can choose their own finishes and dictate to a certain extent how much money they spend on their next home. Purchasers who take advantage of non-contingent purchasing options with companies like NVR/Ryan Homes are even getting their closing costs covered! The regional giant home builder has posted record sales numbers in the past two months to prove this point.
Flipped homes are still performing well, however career flippers (especially those who operate in the first time home buyer arena) are struggling to find inventory. That’s because acquisition prices are going up, margins are shrinking, and the labor pool has been fickle.
In summary, the law of supply and demand prevails! It is not subjective, and those willing to take advantage of the supply shortage will be rewarded handsomely. Those who decide to hunker down and ride this thing out will likely need to hold out through another market cycle (5-7 years) to be able to maximize this equity. As they say, whatever goes up, must come down!
Get ready to sell your house
If the pandemic walls are closing in on you, familiarize yourself with your favorite paintbrush, saw and hammer, and get your home ready for listing. Let’s win the beauty contest and the price war, get you paid, and then find a home you love and can afford. You should have a sizeable chunk of equity you can apply to your new purchase — even if you bought in 2019!
Like Gary Keller said, “We can still transact 95% of our normal business so long as everyone is understanding of the fact that we will be slightly inconvenienced along the way!”
We also know that growth happens outside our comfort zone, which brings me to another bit of wisdom we often use in the Keller Williams world: “No pressure, no diamonds.” Listing your house is a challenge — especially during a pandemic — but it’s also an opportunity to reap great financial rewards.
Are you ready to take advantage of this historic moment in real estate and sell your home? Check out our Seller’s Process at Ruckart Real Estate to get a sense of how we operate. And when you’re ready, reach out to our team to find out how we can work together to make your next big move.