Viewpoint: COVID-19 is impacting Baltimore’s housing market, but not how you would expect
This question of how the coronavirus pandemic will affect Baltimore’s housing market has been circling the walls of our brokerage all month. I met a woman at a listing appointment recently, and when I reached out to shake her hand, she visibly hesitated before accepting.
Emails are swirling – should we cancel open houses? Should we fist bump instead of shake hands? We meet new people daily and are in an out of homes where people live. Are we at risk?
People are cautious, and rightfully so. The novel coronavirus has more than 13,000 confirmed cases in the U.S. and over 100 so far in Maryland as of Thursday evening. This global uncertainty has caused the stock market to plummet. That same uncertainty has carried over to many of our clients locally who are thinking about making a move this year.
This virus may impact the housing market in Maryland, but not in the destructive way you might think.
The recent dip in the stock market has indirectly lowered mortgage rates to historic lows – we are even seeing rates that start with a “2.” This means if you want a mortgage payment of $1,800 a month, in February you could have bought a $300,000 house with 3.5% down (including property taxes, private mortgage insurance and homeowner’s insurance). Now, you could buy a $340,000 house with an identical down payment. The buying power there is truly life-changing for anyone considering buying a home right now.
On the selling side, inventory is already low, and in the counties, homes are moving fast. Those that show well and are priced correctly are selling quickly, often with multiple offers and escalation clauses. Sellers are able to negotiate favorable terms within reason. We continue to have more buyers than homes that meet their criteria, and our brokerage is not alone.
There are forums of local agents networking to try to find their buyers a hidden gem that hasn’t hit the MLS, the state’s real estate database. We have been sending letters to owners of houses that meet our buyers’ criteria to try to find something off-market because active inventory is at such a historic low.
As realtors, we analyze buyer patterns that indicate how the local market will perform, what neighborhoods will be hot for our buyers and what migration pattern our buyers and sellers follow. Recent data points to high engagement with online home searches, which generally correlates positively with buyers looking in person and eventually buying. All of these factors suggest current buyer demand is not going to slow down anytime soon, coronavirus or not.
What does this mean for you?
If you are a homeowner, consider leveraging your equity into your next home. If you are ready for the upgrade and can find a house that works for your needs, now is a great time to maximize your equity on the sale of your home while taking advantage of low interest rates when you buy.
Not ready to move? Look into refinancing. You could be saving hundreds each month on your mortgage payment, and may not have to dip into your pocket to do so.
If you are thinking about buying, know exactly what you are looking for, and make sure you are pre-approved before starting your house hunt so you are prepared to make a competitive offer. There are many ways to win out over other buyers just by structuring a smart offer. Don’t shy away from a competitive environment. The low rates alone make buying a strong proposition for many buyers right now.
Whatever side of the equation, make sure you are working with an agent who you trust and fits well for your situation. If you are worried about seeing homes in person, opt for a virtual tour. Technology allows buyers to vet out properties with Facetime or video tours with their agent, which allows buyers to at last narrow down options from afar.
Sellers, ask potential buyers to use hand sanitizer before entering the home, use foot coverings and wipe down surfaces before and after any scheduled closings. Our office is discontinuing open houses and broker openings after this weekend for at least two weeks so we can better identify who is coming in and out of each of our listings.
The housing market is still alive amid this pandemic because people still have to move. This type of shift filters out buyers and sellers who are less serious and can produce a positive situation for both sides in a home sale. Proceed with caution (and sanitizer), but proceed!
Kelly Schuit is owner and managing partner of W Home Group in Timonium.