With social distancing being an important part of life at the moment and so many parts of the economy suffering the effects of state lockdowns, some are worried about how all of this will affect the housing market. This is especially a concern for those who were hoping to buy a new home and have seen their plans potentially derailed by the pandemic. Is now a good time to consider buying a new home, assuming that it’s even safe to do so?

Depending on where you live, the answer may be surprising.

It’s A (Temporary) Buyer’s Market in Some Markets

…But not everywhere. With the current state of the world, the demand for real estate has dropped significantly in some parts of the US and Canada. This has left many of those who have already listed homes for sale or who were planning to list over the summer in a position where there are far fewer people looking at their properties. For some sellers, this isn’t much of an issue; they can simply wait it out and stick to their previous plans. A lot of sellers don’t have that luxury, though. This creates a temporary buyer’s market where a lot of sellers are willing to consider offers that they wouldn’t have in the past, giving potential buyers a lot more control in the home buying process.

As the name suggests, it’s always good to buy in a buyer’s market, especially if it’s only going to be temporary until the market rebounds. It isn’t necessarily a great time to list a home for sale, of course, since you might have to settle for a lower offer than you were expecting if you want to move the property. This usually helps to balance out the market, with listing rates slowing down to meet demand until things pick back up again.

With all of that said, not every market is experiencing this pandemic the same way.  In fact, many markets remain a seller’s market due to low inventory and a highly motivated segment of the buyer market.

In the Greater Boston area, inventory is low and buyers are motivated.

Most of the time, a buyer’s market is caused by shifts in the economy that have people trying to save money; an example of this would be a recession. These economic shifts temporarily reduce the number of people who are willing to take on large debts, creating a glut of sellers trying to entice a smaller pool of buyers.

In the current local market, inventory is at a severe shortage due to the COVID virus as several sellers put off their plans to list in the spring and wait until later in the year. Several buyers have likewise decided to pause their home search which has allowed other motivated buyers to take advantage of the lack of competition despite the low inventory by continuing their home search throughout the pandemic. 

Homes that would typically have sold quickly are sitting a bit longer which has allowed discerning buyers to capitalize on the temporary pause in the market by other buyers. As the inventory levels catch up with buyer demand, we will also see more buyers enter the market which will likely prevent the local market from significantly skewing one way or the other as we remain in a transitional state of the market.

There’s still a lot of uncertainty surrounding the pandemic, including how long it will last, so with this external factor and the currently stunted economy we could see overall demand stay low for longer than you would expect as only the highly motivated buyers resume their home search.

Market Recovery

This isn’t to say that the market won’t recover, of course. Despite the total number of sales declining dramatically, the median sales prices in Massachusetts through April have largely increased compared to last year. In fact, until COVID hit, many parts of the country had experienced the most active first quarter in history.

Some states have already started reopening non-essential businesses and other parts of the economy, and other states have plans to start reopening soon. The economy will likely stay sluggish for a while, but reopening is the first part of recovery. Even the pandemic is becoming something less of a factor as people continue to practice social caution and science continues to work toward treatment and vaccine options. While market recovery may take longer than in the past, a recovery will happen, and the good deals that buyers can find now will become less common as things move forward.

Buying Safe

If you do decide to shop for a home in the current market, make sure that you’re smart about it and stay safe. We strongly recommend finding a local real estate agent who understands how to navigate buying during COVID-19 to help you in this process. Click here to learn how we can help.

Of course, be sure to maintain all physical distancing practices while looking at homes, even if there is only a seller or agent present. Ask whether no-contact options such as virtual tours or virtual closing with digital signage are options, and if touring the property, request that any doors or other barriers be opened before you arrive to reduce contact. Wear a mask, bring hand sanitizer and take the same precautions that you would in any other social situation. This may seem excessive for viewing a home, but keep in mind that these practices not only protect you, but also protect the seller and agent as well.