Many people are questioning if they should be looking for a new home right now or if they should postpone their search until lockdowns and restrictions lifted. Barbara Corcoran (founder of the Corcoran Group), Shark Tank judge and a residential brokerage based in New York, explained to Yahoo Finance that if you’re looking to buy a new home, now may actually be a good time for several reasons.
When the global coronavirus pandemic ends, the real estate market will experience a series of changes. With property prices increasing and financing potentially becoming harder to get as banks revise their lending standards. Corcoran is advising people to ‘find deals now.’ Mortgage rates are falling back down with a number of the ‘big lender’ banks cutting rates between 5 and 20 basis points due. If you can get a lower mortgage rate now, you should consider your options.
Many sellers have pulled their homes off the market, which is lowering inventory and inflating prices. According to the Canadian Real Estate Association (CREA), home sales were down 14% nationally in March as a result of the pandemic. Preliminary data is showing that April is also seeing sales and new listings that are approximately half what they would normally be this time of year.
To put it simply, everyone is going to be coming to the market at the same time when economic activity begins to resume. Corcoran stresses that “If you’re smart enough to attack the market as an educated consumer, and get out there, and make a bid on a sweetheart deal, you’re gonna be the smartest guy. And everybody’s going to applaud you six months from now.”
It's true that the real estate industry has seen many restrictions enforced that have impacted daily operations and transactions. However, despite the current situation, prospective buyers must stay informed of the daily listings because there are still incredible deals out there. To properly do this, buyers should learn about their local market, regularly monitor sales data, and search online – virtual is our new reality. Becoming an educated buyer ensures that people are in a position to actually recognize a good deal when they see it.
“Every real estate cycle that has gone up and down, the deals weren’t made in the down cycles, nor in the up cycles. They were always made in the times where there’s the greatest uncertainty where everybody’s guessing.” We are in that down part of the cycle and as always, this too shall pass.
Call your agent to get more information and advice on whether this decision is the right one for you.
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