Will the Coronavirus Impact Baltimore’s Housing Market?
This question has been circling the walls of our brokerage all month.
Emails are swirling… should we cancel open houses? Should we fist bump instead of shake hands? We meet new people daily and are in and out of homes where people live. Are we at risk? Should we care?
I met a woman at a listing appointment today and I reached out to shake her hand and she visibly hesitated before shaking back. The Coronavirus has just over 300 confirmed cases in the US at the moment with 3 so far here in Baltimore, but people are cautions and rightfully so… If the US faces a similar crisis to China with the almost 80,000 confirmed cases, we could be confronted with difficult goodbyes and an economic standstill in our industries.
This global uncertainty has caused the stock market to drop almost 10% in less than a month. That same uncertainty has carried over to many of our clients locally, who are thinking about making a move this year. This virus may have an impact on the housing market in Maryland, but it may not be in the way you are thinking!
The current dip in the stock market has indirectly lowered mortgage rates to historic lows. We are seeing rates that start with a 2! This means if you want a mortgage payment of $1,800 a month, in February you could afford to buy a $300,000 house with 3.5% down (including property taxes, PMI and insurance). Now, you could buy a $340,000 house for an identical payment. The buying power there is truly life changing for anyone considering buying right now.
On the selling side, inventory is already low. Inventory in the counties is moving fast. Homes 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. We spend time sending letters to homeowners of houses that meet our buyers’ criteria to try to find something off-market, because active inventory is at a historic low.
We analyze buyer patterns that are key indicators of how the local market will perform, what neighborhoods will be hot for our buyers and what migration pattern our buyers and sellers follow. Looking at the current data shows us a high engagement with online home searches. This generally correlates with buyers looking in person and eventually buying. Everything points to the idea that 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 a re-fi! You could be saving hundreds each month on your mortgage payment and may not have to come out of 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 when you find the one. Keep in mind, price is only one of the multiple terms that go into making 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 now a strong proposition for many buyers!
Whatever side of the equation, make sure you are working with an agent you trust who is a good fit for your situation… and pack hand sanitizer!