Traditionally, the spring market is prime time for real estate agents and brokers, with homeowners in many markets aiming to roll out their listings in time to greet throngs of eager buyers. However, COVID-19 shutdowns in mid-March put a crimp in a lot of plans, causing many sellers to cancel their listings in favor of a more cautious, wait-and-see approach to the market.
Now, the pent-up demand on both the buyer and seller sides appears to be driving a late market renaissance and analysts are predicting an unusually active fall market. This has implications for both buyers and sellers. The good news is that this rare fall market offers the perfect opportunity to make your 2020 real estate dreams a reality.
What the 2020 fall market means for buyers.
For buyers who had planned to make major moves in the spring, the disruption caused by COVID-19 may have put those plans on hold. While many buyers remained interested, they struggled with backlogged mortgage lenders, new virtual processes, and low inventory. However, fall is looking more and more like a great time to go home shopping. Here’s why.
Record-low interest rates
According to Freddie Mac’s Primary Mortgage Market Survey (PMMS), interest rates continue to fall to new record lows, spurring existing homeowners to refinance and buyers to buy. In addition, these low interest rates may make it more enticing for existing homeowners to start looking at upsizing, adding even more interested consumers to the buyer pool this fall.
The need for space and privacy
As dozens of top-tier companies vow to continue work from home permanently, many two-income families find themselves looking for space for two home offices and virtual classrooms for the kids. This is pushing more and more buyers out of their starter homes and condos and into larger homes that can accommodate the added workload.
Besides more space, many buyers are increasingly interested in more privacy, including larger lots, greater security, and less neighborhood contact. In addition, features like guest suites or guest houses, alternative dwelling units (ADUs), and garage apartments can successfully transform into on-site offices, offering more privacy for conference calling, Zoom meetings, and other work-from-home necessities.
More focus on the outdoors
As camps and school sports were canceled, buyers began looking for alternatives to get the kids up and moving outside the home. That means that there’s an added incentive to invest in homes with more outdoor space, including greenspaces for playtime and hardscapes for outdoor crafts and activities.
In addition, homeowners may be looking for added recreational options like nearby parks and hiking trails. With parents and kids home all day, walkability is a desirable quality and neighborhoods with outdoor lifestyle amenities may be particularly attractive.
What the 2020 fall market means for sellers.
When would-be spring sellers canceled their plans to list, they left behind a low inventory market and a host of frustrated buyers forced to bid far over asking price for the few available homes in their chosen neighborhoods. That may be good news for sellers who are now ready to brave the market and finally get their homes sold.
More potential buyers
Because of the low inventories in spring and summer markets, fall sellers may find a significant number of potential buyers pre-approved and eager to make an offer. In many markets, this is leading to multiple offer situations and the potential for above-asking price offers as new sellers benefit from unusually high comparable property values.
Another benefit for sellers is the willingness of hopeful buyers to forego long lists of repair requests and extensive contingencies in order to make their offers more attractive. This may provide a good opportunity for as-is sellers and absentee owners to facilitate an easier, more streamlined sale process.
Rising alternative markets
The increasing availability of work from home options may allow many prospective buyers to look outside of their in-town or exurban markets. This could be good news for the outer-ring suburbs and rural communities that rarely get a boost from a hot real estate market.
In addition, many young first-time buyers may have far more choice of where to live than ever before. If they don’t have to move to the major urban centers in order to snag the best jobs, these Gen-Z and younger Millennial buyers may be able to make their homes in more affordable areas off the beaten path.
Luxury market boost
Increasingly home buyers are looking for properties with more space for multiple home offices and virtual learning environments, larger lots for outdoor play and recreation, neighborhood greenspaces for active lifestyles, and upgraded recreational amenities like pools, tennis courts, and basketball courts. Where can you find all of that? In a luxury property.
Following a significant 2019 slump and an initial decline when COVID-19 first hit, luxury homes appear to be enjoying a strong recovery, holding their value and selling quickly in most of the largest markets throughout the country. Anecdotally, many long declining luxury markets are undergoing significant recoveries and others are growing at a healthy clip. New home construction starts, seen by many as a solution to tight inventory, have exploded in recent months as well.
If you’ve put off your purchase or sale due to the uncertainty around COVID-19, the exciting fall market may just allow you to meet your goals before the holiday season starts. As always, your journey begins by talking with your real estate agent or broker to find out the latest information about real estate values and trends in your area.