During this time of uncertainty, it’s reassuring to be able to ask a question + get an answer from a trusted pro.
We recently asked you to send us your questions about the real estate market – and now we have answers, thanks to the experts at Coldwell Banker Caine.
Q: I’m ready to put my house on the market. Are people still buying now and what price ranges seem to move faster once listed?
A: Great question. One of the best ways for a REALTOR® to provide insight about the rate of sales and prices is by reviewing activity in our local Multiple Listing Service (MLS). The chart below shows the number of homes that are currently listed as well as those that sold over the last 6 months. The two lower price ranges have more buyer demand and the lowest inventory, albeit before the onset of the coronavirus.
We’ll continue to use analysis like this comparison to understand the full impact of COVID-19 on rate of sales and pricing over the next couple of months. Our expectation is that general patterns will remain in effect despite the crisis, with lower priced homes continuing to outpace more expensive homes.
Q: Prior to the coronavirus situation, my goal was to list my house in late April. I’m now concerned buyers will be extremely cautious, or that I won’t be able to sell for as much. Should I wait?
A: Historically, Spring is our busiest season, so you’re not alone in planning to make a move in the near future. In light of current conditions, however, your concern is definitely understandable. One piece of real estate advice we always suggest our clients keep in mind is that homes sell in every type of market. As long as a house is positioned and marketed properly, we’re confident it can sell.
That said, we do expect demand to temporarily soften for a period of time because of the COVID-19 crisis. It’s worth noting, though, that homes are still selling every day. Our market entered this situation with extremely low inventory and strong demand, which is good. We expect, at least for the short term, that our buyers will have more options, while sellers will see less activity on their homes. We anticipate that home appreciation will weaken as buyer demand decreases, but the exact effect on home values or days on market will depend on your price point and area, which is why advice from an experienced REALTOR® can be so valuable in a time like this. One data point that hopefully gives you some comfort is that home prices have continued to increase throughout three of the last five recessions.
Q: Has COVID-19 affected home appraisals?
A: Home appraisals are based on recent real estate history (usually closings from the last six months), which means it’s not clear yet to what extent the current situation will impact them. We expect appraisals may be influenced by changes in the marketplace associated with COVID-19. As the number of buyers in our market decreases, appreciation will soften, which means the rate at which home values increase will slow down. We’re reminding our buyers and sellers that this doesn’t necessarily mean prices will drop, just that valuations won’t go up as quickly as they did in 2018 or 2019.
It’s also worth mentioning that currently there is a delay in the appraisal process across the Upstate. This is due in part to high refinance demand given our low interest rate environment, in which appraisers are having difficulty keeping up with lenders’ requests. Delays are also a result of the simple fact that some people don’t want appraisers in their home right now, or appraisers don’t want to enter homes. This combination has extended appraisal timelines in our area from about seven days to approximately 14, which in turn is prolonging the closing process.
See more questions + answers on CB Caine’s blog post. Ⓟ
