It is no secret that the COVID-19 pandemic has had an impact on everyone. The economy suffered, people lost their jobs, and businesses shut down in order to maintain physical distancing to curb the spread of the virus. However, there are a few impacts that were overlooked.
In addition to the public health crisis and the tanking of the stock market, there were also impacts of the virus on people’s home values. Some of these impacts were positive while others were negative.
Regardless, it is important for everyone to understand how these impacts might impact someone’s home value, particularly for those who are looking to buy or sell a home in the future. So, how did the coronavirus pandemic impact property values across WA, OR, ID, and CO?
The Dropping Rates Of Mortgages
Because of the shelter in place laws surrounding the COVID-19 pandemic, many buyers chose to put their homebuying plans on hold. Plus, many sellers also chose to postpone selling their properties in an effort to avoid spreading the virus.
The economy has also took a huge hit, for obvious reasons. The economy nearly came to a complete halt over the past few months, prompting officials to keep rates as low as possible to help foster and encourage lending and spending to give the economy a boost.
As such, interest rates on mortgages were extremely low over a certain time period. In fact, the rate for a 30-year fixed-rate mortgage hit all-time lows several times in 2020, and it’s quite possible that may happen again.
Considering how low rates have been, more buyers were incentivized to consider buying homes in cities like Seattle and Boise. As more buyers came out of the woodworks, the number of mortgage applications has been increasing.
With more interested buyers on the market sparking demand, property values increased as a result.
Housing Inventory is Scant
As more and more buyers got into the market after so much pent-up demand was released, there wasn’t – and still isn’t – enough housing supply to keep up. And when demand outweighs supply, this can drive the value of homes up.
It’s a basic economic concept that explains what impacts prices of goods, including real estate. Until inventory builds up ion the form of new housing starts or from more sellers listing their homes on the market, the demand will continue to be strong and the value of homes will continue to be strong.
The Impact On Sellers
As a result of the low-interest rates from the COVID-19 pandemic, this also meant that sellers received a large number of offers for their homes. Tied into what we said above, with more buyers on the market, the more demand there is for homes. This is a good thing for sellers as it gives them more negotiating power when wheeling and dealing with buyers.
There are still many people who are hesitant to sell a home. This means that there might not be many options on the market. As such, the inventory is not enough to keep up with demand. In this type of environment, homes can sell very quickly and for top dollar. And the chances of bidding wars may also be higher.
For those who decide to take the plunge, they might be rewarded with more offers than usual. This is going to drive up the value of their home, which is good for their next purchase.
Ready to Apply For a Mortgage?
Do you have questions about home loans? Are you ready to apply for a mortgage to buy a home? If so, Sammamish Mortgage can help. We are a local mortgage company from Bellevue, Washington serving the entire state, as well as Oregon, Idaho, and Colorado. We have offered many mortgage programs to buyers all over the Pacific Northwest since 1992. Contact us today with any questions you have about mortgages.