The housing market took a terrible hit in 2020 because of the coronavirus. The usual real estate bustle during springtime was nowhere to be found as folks set aside their house-hunting and selling plans with the government’s stay-at-home orders. This greatly affected the industry’s activities for that season, leading to many closed businesses, both temporarily and permanently.
However, despite the pandemic, many folks were still eager to move, which helped the industry make a quick rebound with home buying and selling. The only concern is there is unprecedented shortness in supply brought about by the pandemic. This meant that in markets where there are far fewer homes listed, the prices soared higher.
That trend somewhat continued throughout the year and carried over into 2021. It is still a seller’s market out there which could be very beneficial to homeowners who choose to sell their properties now.
If you’ve been thinking about selling your home, you have two choices. You can either sell now and take advantage of the current demand and market prices or wait until the pandemic is over, whenever that is.
To help you make a better decision, we have listed three reasons for you to sell now and three reasons why you should hold out on selling until after the pandemic.
Why You Should Sell
Reason #1: Interest rates will remain low
Just so we’re clear here, even before the pandemic hit in 2020, real estate professionals and economists have already predicted that interest rates will be low, placing it at about 4% for the majority of the year. The pandemic only lowered it further. According to Freddie Mac, a 30-year fixed-rate mortgage hit a record low of 2.71% in December 2020.
But while interest rates are expected to remain low this year, the limited supply of properties listed will balance it out. Almost every mortgage company will tell you that the lack of supply versus the high demand will only bring property prices up. Eventually, as we go further into the year, interest rates are expected to slightly increase to around 3.4%, which is still pretty low.
Reason #2: Your property is considered a starter-home
Entry-level properties are very likely to be one of the most in-demand properties this year, especially if it is located in an area where property prices are climbing and bidding wars are commonplace.
Given the lack of available homes and people’s eagerness to still move despite the pandemic, starter-homes — typically considered the lower third of an area’s home sale prices — will still sell fast and get you a good return, even if it’s slightly below your selling price.
Reason #3: You’re moving to a different area
If, by some unavoidable circumstance, you need to move to another place, then selling is an option you should take. There are several reasons why people move, and some of them aren’t pleasant at all. If you got furloughed and lost your job during the pandemic and you can’t continue to make payments on your property, then selling is the best option for you.
Why You Should Not Sell
Reason #1: You have just recently refinanced
If you’re one of those homeowners who have recently refinanced, you can put off selling your property at a later time. There’s no immediate reason for you to sell your home soon unless you’re moving elsewhere. But even then, given the present conditions, you should still give moving some more thought as it may not really be the best time to move unless it’s necessary.
Reason #2: You’re facing some financial uncertainties
Let’s say you’re not unemployed. The uncertainty surrounding our circumstances today will somehow point to you delaying the sale of your property and the purchase of another house. Until you know what the future has in store for you, the wisest thing to do is stay put.
Now, if you’re somewhat experiencing some loss in income, you might want to take this time to talk to your lender about specific options that can be mutually beneficial to both of you. Perhaps you can negotiate to restructure your loan or set-up certain payment arrangements to help you stay in your home while they still get to recoup some of the money they put out for you.
Reason #3: There are not many properties available on the market
Lastly, if you’re selling, then the seller’s market works for you. But If you’re selling your property and intend to buy a new one, you’re left with the challenge of not having enough options on the market. This is one of the risks of selling a property at this time. You might think that you have it all figured out, that you can use whatever it is that you earn from your sales to buy a relatively cheaper but better property but is it worth risking living on the streets or in your car because you were not able to find a property at this time?
Holding out until after the pandemic will somehow get you into a more balanced market. And while you may not exactly get the high-priced deals in this seller’s market now, the equilibrium in supply and demand ensures that there are far more options for you to choose from compared to the ones listed now.
Given the reasons we have outlined above, we hope that you can come up with a well-informed and wiser decision. The decision to sell or not sell should be approached with careful thought and consideration. Do your due diligence, so you don’t end up having any regrets about your decision.