April 29, 2020
Since the COVID-19 pandemic began, people have been asking us all kinds of real estate questions. The top two are: “Are buyers still looking?” and “Should I still list my house?” While there are many factors that may play in your decision, when you look at the market, it actually is a good time! Although it feels like a slow simmer, here are 3 reasons from the Philly Home Girls point of view, why the Philadelphia real estate market is still cooking and why it won’t quit.
People Still Have to Move
Spring and summer are typically a busy time for real estate to be moving and shaking. The most popular time for tenants to sign a new lease is April-May or August-September. Same goes for home buying. The “spring market” is historically the season when the most homes are purchased and sold throughout the year.
The stay at home order has delivered the real estate market with a swift blow, but it hasn’t been as drastic as you might think. The week ending April 15 had 9% fewer buyers perusing Philadelphia listings on Zillow compared to the same week in 2019. Here is the thing…that means buyers have 9% less competition than last year when making an offer on a home! In early 2020 our agents were receiving multiple offers on listings. Now with low-interest rates on your side (more on that below) and more room to stretch your elbows and make your offer stick, spring 2020 could be exactly the right time for you to find your dream home!
Zillow also reports Philadelphia had 49% fewer new listings in March 2020 vs March 2019. While many sellers feel it’s natural to wait until the stay-at-home orders have lifted, buyers are still looking. If everyone waits to list until quarantine is lifted, there will be many sellers in competition. Jeanne Whipple, owner of Philly Home Girls advises to “put your home on the market now, and let buyers fall in love with it. You will have more eyes on your property and less listing competition.”
Kevin Gillen is an economist and Senior Research Fellow at the Lindy Institute for Urban Innovation at Drexel University, whom Realtors rely heavily on for his market statistics. He shared in his recent quarterly report that “ The prices and sales volume for just the month of March were broken out separately from the data, and they did not indicate any significant plunge from either January or February or even from March of last year.” Some people cannot change their plans to move regardless of the situation we’re facing. People have been relocated for work, leases are ending, families are growing, jobs are lost, expenses need to be reduced, and some people just cannot live with their roommates for one more second.
Rates are low
You have probably heard the news that as of spring 2020, interest rates are at an all-time historical low. Rates hovering at and below 3% makes it hard to resist seizing the moment.
The difference between a 3% and 4% interest rate on a $300,000 loan is $162 bucks a month or $1,944 year. Combine that with homebuying programs like the First-Front Door Grant or the Neighborhood Opportunity Program and the benefits are irresistible!
Technology
With so much at our fingertips, real estate can actually keep moving along without much interruption. It looks and feels a little different but every day our team connects with our brokerage, Elfant Wissahickon, to be sure rules, regulations and safety guidelines are followed.
Virtual tours including 3D and video allow you to peep at homes for sale without interrupting your backyard lounging, margarita in hand. If you fall in love, give your Philly Home Girls agent a call, they can set up a Zoom or facetime tour with you and the seller for a closer look. We can help, you make an offer with or without a Covid-19 addendum. This addendum provides a contingency “upon seeing the home in person” so you can put your house on hold until the shelter-in-place order has been lifted and if it isn’t what you expected in person, you can cancel your contract and your deposit will be refunded.
Same goes for inspections and appraisals. Until these service providers are deemed necessary, we can use the Covid-19 addendum to extend our contractual timeline until the quarantine is lifted.
Digital notaries will allow you to get that important paperwork signed, sealed, and delivered electronically. No gloves needed! Virtual and social distance closings allow you to receive your keys in hand without compromising your safety. (use image of social distancing closing here)
Not quite on the buying train just yet? Join us for our monthly free virtual homebuying workshop. We are all about empowering you with the knowledge and numbers to learn how buying a home is more cost-effective than renting. Learn about homebuying myths and the impact of credit scores, discover unique financial programs, and let us show you that you don’t need a nest egg to buy a nest.
We’re here to help
As things change, it is our job to keep up with them. If you have questions about the current market, what is happening with showings, inspections, or interest rates, we are only a Zoom, text, or old-fashioned phone call away!
Saving money for a downpayment and closing costs is the # 1 reason people are holding off on purchasing a home. PHG agent Rachel Shaw came up with a trusty list of some of her favorite homebuyer assistance grants and loan programs. With a little help, your dream of owning a home may not be as far off as you thought!