When restaurants closed, I think we all panicked a little. Having triplets means extensive meal planning, cooking, and of course, cleaning. Maggie and I are no strangers to cooking at home, but we love the Minnesota food scene and regularly enjoy a meal out. Savoring local delights and avoiding cleaning duties was a Saturday night ritual we took for granted! We felt blessed to afford the weekly dining out experience and knew budgets and priorities could change, but we never thought the opportunity would disappear.
After hearing of the government’s plan to shut down restaurants, salons, spas, and other businesses, and after our own selfish feelings subsided, we thought of our friends, family, and clients in the restaurant business. Many of them faced job loss and the challenges of serving their community and supporting their employees. In discussions with fellow business owners, anxiety of the unknown was the recurring theme. Should they continue to promote their businesses and plan to reopen to full capacity in weeks or months? Or would they come back with a downsized team? Would they close altogether? Those questions certainly made for some heavy conversations.
I know my clients are facing a similar question: Is now the right time to buy or sell? While we’re not sure if we can answer that question with a hard yes or no, we tried to answer a few fundamental, related questions. I hope these answers will help some of you make the decision about buying or selling during the pandemic.
DO PEOPLE STILL WANT TO BUY AND SELL HOMES RIGHT NOW?
Even in the midst of a crisis, society hasn’t halted completely. People are still moving in and out of homes. Plus even if buyers’ and sellers’ needs are changing (sellers might be conducting virtual tours instead of in-person tours, for example), they won’t necessarily just give up on buying or selling a home completely. Finally, some people are striving for some element of normalcy during this time, and for that reason might decide to press forward with their plans to move despite the uncertain times.
WILL BANKS STILL LEND?
When the market looks shaky, as it certainly does right now, lenders usually tend to hedge their bets a little more carefully. That said, when it comes to the residential housing market, early signs indicate that there aren’t any serious problems. However, like most things during this time, that could change.
WILL CHANGES IN QUALIFICATIONS, EMPLOYMENT, OR COMPENSATION BE AN ISSUE FOR POTENTIAL BUYERS?
In short, we can’t know for sure. People working in the health care industry, who were at first assumed to be immune to the economic downturn because of the essential nature of their jobs, are starting to also face financial challenges. That said, the hospitality and retail sectors were the hardest hit by the pandemic. However, we can’t know the full extent of this crisis on the populace’s ability to buy a home just yet.
WHAT WILL HAPPEN TO INVENTORY?
Inventory in most price segments was limited going into the fall of 2019. Real estate agents and buyers were optimistic that price increases would entice more sellers to sell, thereby improving inventory to consider. The coronavirus seems to have slowed sellers on a case-by-case basis, but no broad trend of seller apprehension has been mapped just yet. Properties marked “temporarily not available for showings” spiked in March and April, but things continue to improve looking into May and beyond.
WHAT WILL ACTIVITY LOOK LIKE?
Despite an initial downward trend, transaction volume for home sales is looking far better than expected. On top of that, experts have said that the first wave of coronavirus infections was not as bad as they feared it would be, whether that was because people stayed home or because of sheer luck. That could bode well for people getting back into the home-buying or selling process.
What happens next? Even though volatility in the market has been limited, things could definitely change. If you are concerned about the direction the market is headed for your specific property, feel free to call me and talk about it. Stay healthy and safe!
~Fritz Soberay
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