Author – Pat Roach – President, Southwestern Real Estate
Pandemic or not, people still need to move. With all the shelter in place orders, we were fully prepared for the fact that buyers would stay home and sellers would simply wait to sell once things became more predictable. While it’s true that some people are holding out, not everyone can wait. Here’s what we’re seeing as we work with buyers and sellers during this unique time: Conditions should be great for sellers, yet buyers are coming out ahead. If you read that and found yourself scratching your head, welcome to the club. In a word, it comes down to FEAR.
Typically, real estate pricing is a reflection of market conditions—primarily supply and demand. Low supply tends to help sellers, but right now, sellers who really need to sell seem to be concerned with how long buyers are going to sit on the sidelines—and in turn, how long until they are willing to make a deal. Several of my last few buyers were able to secure properties for below fair market value, as the sellers seemed willing to do whatever it took to sell their property. This is particularly true for properties that have been on the market for a month or more.
Now, time for a bold prediction. The leverage is likely to shift heavily to the advantage of sellers as soon as states go back to business as usual. From my experience as an active Realtor in the western suburbs of Chicago, here’s what we anticipate: Interest rates are back to historic lows, and rental rates are holding at a reasonably high level. So, buying will be the more affordable option for most people. Once buyers feel that things are starting to stabilize, they will likely come out in full force. In most markets, the inventory is quite low. That is likely to remain the case even when you add in those buyers who have been patiently waiting for normalcy. Once the demand kicks in, sellers are likely to be more bold and prices will start to appreciate once again.
The real estate market is always changing and, in times like these, it is critical to work with a full-time Realtor who is engaged on a daily basis with buyers and sellers. This is not the time to work with a part-time agent. Things are changing so fast, there’s no way a part-timer will have the awareness to read the market properly and help you take advantage of this unique time.
There’s no need to feel alone during the home-buying process. Allow us at Southwestern Real Estate to help you navigate this ever-changing market when buying or selling a home. You can visit our website here and contact us today.