COVID-19 Affects on the Housing Market
Covid-19 and Its Affect on the Houston Housing Market
If you are an investor, a homeowner, or a homebuyer in the Houston market, how will the covid-19 pandemic affect home sales and home values? You would think that the pandemic, along with the dropping price of oil, would drive down home sales in the greater Houston area. But things may not be exactly as they seem.
The 2020 housing market started off with a bang with sales increasing by around 14%. Historically low interest rates had buyers on the hunt. Lower mortgage rates meant that buyers could now afford more house than they previously could. This demand for housing drove the average single-family home price up by about 4.5%.
In late spring, as pandemic conditions continued to worsen, sales began to fall. People were not sure of their job situation. Sellers weren’t sure if having strangers traipsing through their home, possibly bring the disease with them, was the smartest thing to do. So listings on the MLS began to drop.
Good News: It’s Time to Buy
Houston is now a buyers’ market. Appreciation is above the national average and people who are fed up with conditions and costs in western states are eager move away from there and enter into the Houston market. Texas in general, and Houston in particular, have also attracted the attention of many overseas investors.
Why the Houston Area?
Job creation is the number one reason to buy now. Houston’s unemployment rate is far below the national average. With steady paychecks coming in again, buyers’ confidence is rising. They realize that they will be able to meet their monthly mortgage requirements.
Houses cost 5%-20% less when compared to the current national market. Combine that with the lowest interest rates in recent history and you will understand that now is the time to lock in a nicer and larger home than you expected to be able to afford.
The appreciation forecasted by real estate experts is 10.5% over the next three years. That means if you buy a $230,000 home today, it should appreciate in value to around $255,000 in just three short years. You would have a hard time investing that kind of money anywhere else and make 10.5% in three years. Plus you get to live in the home and enjoy it while all this appreciation takes place.
For investors, the median monthly rental rate in the Houston area is $1,400. That’s up over 6% from last year.
How Buying & Selling Is Happening Today
Covid-19 has made the general public a little leery of meeting each other face to face. Buyers don’t want to be going from house to house and possibly exposing themselves to the virus. It’s better for sellers too because it limits the number of people coming through the house, possibly bringing the virus in with them. The creation and use of virtual tours has raised the bar for what is needed to present any home to today’s buyers. After viewing the property via the Internet, only buyers that are truly interested in the property will schedule an in-person visit.
Whoever creates the virtual tour must highlight anything that sets the listed home apart from the competition. Whether the home has an open concept, a newly remodeled kitchen, or a home theater, the virtual tour needs to showoff these important features. For people selling their home during these trying times, patience is the keyword. Once a deal is struck, it may take a little longer to finish up all the details and get to closing. Even with the pandemic, it’s a good time to buy or sell a home in Houston.