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Myths vs. Facts: You’re ready to buy or sell a home now. Should you wait?

May 8, 2020

4 MINUTE READ

With all the uncertainty of the last seven weeks, many potential home buyers and sellers are putting their real estate goals on hold. But with states reopening, we want to set a few things straight about all that’s evolving with California real estate. 

First up: home buyer myths. 

(Thinking about selling a home? Most sellers also plan to buy a new home, so we recommend brushing up on the buy-side of things, too. Otherwise, skip ahead to the seller section below.)

Buyer Myths & Facts

Buyer Myth #1: I only need a few days to get pre-approved for a mortgage, so I should wait.

Fact: If you’re looking to get into a home by summer, start now. Lenders are taking up to 45 days to close a loan.

Why is it taking so long? Low interest rates. The good news is that this is a historic time to get a great rate when buying a home. The bad news is that the sharp increase in demand is overloading mortgage lenders. Refinancing applications also skyrocketed in Q4 2019 when rates started falling. This unprecedented influx of applications is creating long lines for home buyers eager to get on the bandwagon.

Actions you can take:  Start searching for your dream house! Browse listings. Schedule virtual tours. Do it all from the Reali App.

Buyer Myth #2: Housing inventory will rebound after shelter-in-place orders are lifted, so I should wait

Fact: Demand has been relatively unaffected in the CA market and is expected to remain competitive even after Shelter-in-Place is lifted.

Coronavirus aside, there’s an ongoing housing shortage in California impacting supply. The current housing shortage in California isn’t helping the current supply of homes. Sellers who took their homes off the market are beginning to list again, which is great for home buyers. Still, our research shows the demand for homes will not overcome supply. Even post-coronavirus.

Actions you can take: Do your own research on the markets you’re interested in. And it’s never too early to talk to an expert about your unique situation. Helpful conversations are always free at Reali.

Buyer Myth #3: Home prices are going to drop, so I should wait.

Fact: US home prices aren’t budging. The median home price rose 8% year-over-year in March, even in the midst of Shelter-in-Place orders.

California home prices have remained relatively stable, even during COVID-19. We love your optimism, but home prices across the country have remained steady over the past several months. Home buyers, especially in more competitive markets, continue to see multiple offers (fortunately, we offer Cash Offer — a tool to get your foot in the door and increase the likelihood of offer acceptance).

Actions you can take: Start searching for your dream house! Browse listings. Schedule virtual tours. Do it all from the Reali App.

Seller Myths & Facts

Seller Myth #1: Home buyers aren’t looking right now, so I should wait.

Fact: Google data shows that searches for mortgages and homes for sale are up and staying strong.

Buyers are still out there, and the spring buying season has begun. Google and other data show a recent uptick in real estate searches. Real estate analysts have predicted a checkmark recovery since the coronavirus first hit (Yay!). Reali is already seeing a steady increase in buyer activity, especially with many California schools slated to start early this year.

Actions you can take:  If you need to sell soon, start the process now. With rates at all-time lows, mortgage and escrow processing times have increased in recent weeks — pushing out closings by weeks.

Seller Myth #2: Home values will go up after shelter-in-place, so I should wait.

Fact: While much of the world economy has taken a hit, US home prices haven’t.

The cities are out and the suburbs are in. Right now, home prices are strong across California. Listing volume struggles to keep pace with demand, prompting well-priced homes to sell quickly. Looking to sell a home in the suburbs? You and everyone else. With the coronavirus fraying nerves nationwide, buyers everywhere are seeking the comfort of suburban sprawl over the density of the city. The competition could be great for your bottom line.

Actions you can take: Knowledge is power, so stay informed of home price trends in your area. Heck, why not request a free neighborhood market report?

Myth #3: It’s too hard to sell a house during shelter-in-place, so I’m better off waiting. 

Fact: Real estate was deemed an essential service, and for good reason. Sellers now have everything they need for a successful sale, and buyers have adapted quickly to virtual, touchless shopping. (Moving services are essential, too, btw.)

The cities are out and the suburbs are in. Right now, home prices are strong across California. Listing volume struggles to keep pace with demand, prompting well-priced homes to sell quickly. Looking to sell a home in the suburbs? You and everyone else. With the coronavirus fraying nerves nationwide, buyers everywhere are seeking the comfort of suburban sprawl over the density of the city. The competition could be great for your bottom line.

Actions you can take: Knowledge is power, so stay informed of home price trends in your area. Heck, why not request a free neighborhood market report?

 

Bottom line?  You’ve still got options. And with a little help from technology, we’re quickly adapting to the newest version of normal. Real estate, like life, …uh……finds a way.

Ready to buy or sell? Have questions?

Connect with our team now.

 

Oh, one last thing about keeping you safe. Reali has always delivered tech-forward solutions. But now, we’re using that tech to deliver safe stay-at-home solutions to help you buy or sell your home. What does that mean? We’ll follow all social distancing guidelines and take all necessary (and then some) safety precautions when touring homes. Wherever possible, we host virtual open houses and offer 3D tours. Read more about our tech-forward solutions.

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