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It is no secret that the COVID-19 pandemic has had an impact on everyone. The economy has been suffering, people have lost their jobs, and businesses have shut down in order to maintain physical distancing to curb the spread of the virus. However, there are a few impacts that are being overlooked.
In addition to the public health crisis and the tanking of the stock market, there are also impacts of the virus on people’s home values. Some of these impacts have been positive while others have been 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 has the coronavirus pandemic impacted 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 have chosen 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 taken 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 have been extremely low over recent weeks. In fact, the rate for a 30-year fixed-rate mortgage has hit all-time lows eight times so far this year, and it’s quite possible that may happen again.
Considering how low rates are these days, more buyers are incentivized to consider buying homes in cities like Seattle and Boise. As more buyers come out of the woodworks, the number of mortgage applications has been increasing.
With more interested buyers on the market sparking demand, it’s possible that property values may be increasing as a result, though it’s difficult to say what average values and home prices will look like n the coming months as we continue to battle this virus.
Housing Inventory is Scant
As more and more buyers get into the market after so much pent-up demand continues to be released, there is not 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 means that sellers should anticipate getting a large number of offers for their homes. Tied into what we said above, with more buyers on the market, there will be more demand 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 in this environment. 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.
The Future Of The Market During The Pandemic
These are just a few of the many ways that the COVID-19 pandemic has impacted the value of homes. While it is unclear when this pandemic is going to be behind us, it is important for everyone to understand how the pandemic is going to impact them if they are looking to buy or sell a home. This will help everyone make the right decision during a turbulent time.
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 offer many mortgage programs to buyers all over the Pacific Northwest. Contact us today with any questions you have about mortgages.