The coronavirus pandemic Real Estate Myths have people making all sorts of assumptions. But are these beliefs true? To help you separate reality from fiction, here are five prevalent myths about real estate during the COVID-19 pandemic and the actual facts.
1. It’s a terrible time to sell your home
Many home sellers who may have hoped to put their house on the market this summer have put those plans on hold. In early July, new home listings dropped 14 percent compared with the same time a year ago, and total home inventory was 32 percent lower, according to realtor.com.
Fear of coronavirus exposure probably is the main reason people are keeping their homes off the market, but many also might assume that selling a home right now is just a futile endeavor, plagued by few home buyers and low prices.
On the contrary, however, the latest statistics suggest that now is one of the best times in years to sell a home for several reasons. According to Danielle Hale, realtor.com’s chief economist, data suggests that buyers currently outnumber sellers in the housing market, which means it’s better to be a seller than a buyer.
The previously mentioned low housing inventory is one reason why those who do list their homes will enjoy a strong seller’s market, characterized by bidding wars that could fetch them a high price.
2. Home prices are plummeting
Data shows just the opposite: Home prices actually are rising. According to the National Association of Realtors, the national median price for single-family homes grew 7.7 percent during first quarter 2020, to $274,600. Home prices are growing faster than pre-COVID 19, says Hale.
In fact, they’re on pace with the home price growth seen this time last year. The reason? Record-low mortgage rates are boosting buying power, and when combined with a lack of supply, that results in higher home prices.
3. Buyers are holding off on home purchases
According to NAR’s Home Sales Index (a forward-looking glimpse at home sales based on contract signings), pending home sales jumped 44.3 percent in May, the largest month-over-month increase since the index’s inception in 2001. Record-low interest rates are driving much of the buyer demand, says Hale.
Mortgage interest rates dipped below 3 percent for the first time in 50 years, to 2.98 percent as of July 16, according to Freddie Mac. Note: Not all borrowers will be able to qualify for the lowest interest rate, however, with someone who has large amounts of debt or a low credit score likely offered a higher rate. And although the market is booming now, it may not remain that way for long depending on what unfolds with the coronavirus pandemic.
4. Homes can’t be viewed in person
As states issued stay-at-home and social distancing mandates to stop the spread of COVID-19, many in-person home showings and open houses were put on hold temporarily in favor of virtual home tours. By now, though, most of these restrictions have been lifted across the country so homes can be viewed in person—and real estate agents are taking extra precautions to protect buyers and sellers.
Interested buyers usually can schedule an in-person showing that follows social distancing guidelines, and requires everyone involved to fill out a COVID-19 disclosure form and limitation of liability form.
And there’s also sure to be plenty of gloves, masks, shoe coverings and hand sanitizer on hand. In addition, some agents are requiring potential buyers to have pre-approval letters before they can see a home in person, an extra step that can help weed out buyers who aren’t serious.
5. Everyone’s fleeing cities for the suburbs
This is probably the most rampant myth of all, and it certainly makes sense from a pure impulse level. Since social distancing is more challenging in urban centers than in less densely populated areas, why wouldn’t city dwellers want to try and buy a house in the ’burbs?
Well, listings in the suburbs are drawing more attention these days. In May, the number of views on properties with suburban ZIP codes increased 13 percent, almost double those in urban areas, according to realtor.com. But that doesn’t mean that everyone is fleeing to the suburbs, though.
For one, unless you’re extremely wealthy, it’s not that easy to pick up and move. This is particularly true since, while a few companies have announced that their employees can work from home indefinitely, most firms haven’t decided yet whether their employees will one day have to return to the office.
As a result, many of those people surfing suburban real estate listings might be fantasizing about moving, but when it comes to making an offer on a house and packing up their belongings, many might prefer to stay put and see how the coronavirus pandemic shakes out first.