Buying Or Selling A Home During COVID-19 | A Letter From Danny
My name is Daniel Brown and I'm the CEO of Myriad Real Estate Group. We are reaching out to all of our past clients, current clients, and those we hope will be clients to give them regular updates on the state of the housing market and the economy. There isn't going to be an industry or person who isn't affected by either the virus itself or the economic fallout that will surely follow. These are scary uncertain times with a lot of unknowns.
What I can tell you is the housing market in the US, and specifically the Greater Phoenix Area, is on stable ground. We have had 54 recessions in US history and only 1 of those crashed the real estate market. You guessed it, it was the Great Recession. What makes this time different from the last is that we had a surplus of homes on the market in the early 2000's. Builders were building too many homes, consumers were buying homes they couldn't afford, people were over leveraged, and they were using their homes like ATM's.
Today's real estate market is wildly different. Today we actually have too few homes listed for sale, people have a ton of equity in their home, low fixed monthly payments, and most are in a good place financially. Even in the event we see a rise in unemployment I don't think we will see a rush of foreclosures or short sales like we did last time. Mainly due to the amount of equity people have in their homes. In fact, the US Government just instructed Fannie Mae and Freddie Mac to work with homeowners who are in financial trouble. They are now being instructed to defer mortgage payments by up to 12 months in some cases. This means we should not see a rush of homes hitting the market anytime soon.
In every crisis there are opportunities. This is a great opportunity for buyers to take advantage of nervous sellers. What we're seeing is some people becoming a little panicky. Sellers are starting to accept offers they wouldn't have just a couple weeks ago. They are agreeing to more repairs than they had just a few weeks ago. So, things are shifting some to favor buyers a little more. We're also seeing some buyers sitting on the sidelines, that just 2 weeks ago, were very active in the market. We're seeing less multiple offer situations and sellers becoming much more reasonable. For those buyers still looking this could be an opportunity to work a situation to your advantage. If you are in an industry where you fear for your job, then it absolutely makes sense to wait, but if your job is pretty secure this could be a perfect time. Rates are still low, sellers are a little panicky, and so are some buyers.
At the end of the day your health and family are the most important thing, and we support anyone who wants to take a wait and see approach. With that being said every crisis presents different opportunities and for those who don't panic and play it smart. This could be an opportune time to get into the market at a time when some sellers are panicking and other buyers are getting out. I do believe this will pass and will be short lived for the most part. We could see a very rough 2nd and 3rd quarter not only in our country, but the world economy. We will however get through this as we always do, and I believe the economy will slingshot back once this pandemic is over.
Should you have any questions please feel free to reach out to me and I'll be happy to discuss the housing market, the economy, or if you just need a friend I'll be that, too. Thanks so much, stay safe and healthy!
