COVID-19 sent shock waves throughout the real-estate industry. But did it make now a good time to buy a property? The answer to that question will largely depend on what you plan to do with the home — particularly if you are an investor.
As usual, it is a good time to buy an investment property if you can find inventory at a good price. But finding homes at a good price could be something of a challenge (particularly in our area).
When the coronavirus pandemic began to trigger stay-at-home orders across the country, it upended the home-buying process. Companies that specialize in buying and selling homes for a profit put a temporary pause on operations, and real-estate agents had to innovate, moving toward virtual open houses and remote closings to adhere to social-distancing protocols.
With the backdrop of these changes (plus the rapid rise in unemployment) sellers responded by pulling their listings off the market. New listings in the United States were down more than 44% in April compared with the previous year, according to data from Realtor.com. The drop in listings was far greater than the downturn in actual real estate transactions.
However, there are some categories of properties that could start to come on the market in droves in the coming months. The downturn in travel has wiped out the bookings for people who owned vacation homes and rent them out.
Similarly, many mom-and-pop landlords are struggling as tenants miss rent payments. Like vacation-homeowners, those payments tend to go directly toward their mortgage. Savvy investors could find a solid buying opportunity by making an attractive offer to these property owners.
Given the significant uncertainty in both supply and demand, housing prices could get volatile in the short term. However, people looking to stay in their homes, or hold investment properties should find value in the coming months.