“Things will never be the Same”: “Changes” in the local Real Estate Market
So it seems like the theme of our lives right now mimics much of the chorus of one of my favorite TUPAC songs, “Changes”: “That’s just the way it is... things’ll never be the same.” Our worlds have completely turned upside down. No matter our race, age, background, or tax bracket, we’ve all unfortunately been effected by the coronavirus (COVID-19) in one way or another. Everything is different from the way we communicate, shop, work and congregate... or not. What’s even more of a shocker is the changes that have taken place in the stock market and financial sector, namely the real estate market. Now, that’s where I come in.
Just a few of your questions answered “off top” so we’re clear:
Are people still able to get pre-approved for home loans? YES!
Is there inventory for buyers to choose from? YES!
Are interest rates still low? YES! But not as low as the start of the year unfortunately.
Am I able to still tour properties? YES! Although many agents are asking clients to still employ social distancing and to also wear gloves and masks in the homes.
If I’m unemployed, can I still purchase a home? I’m sorry but no you can’t. The bank wants to know that you have the full ability to repay the mortgage loan. So step one in this instance would be to attain stable employment when that becomes available.
Ok, so now that we’ve gotten that out of the way, let’s go through some of the major changes that have taken effect within the market:
Credit Score: The “golden number” used to be 580 but now many lenders are requiring a 620 or above to be financed for a home. My suggestion to you in this instance would be to shop around. Find out what the preliminary requirements are for different bank and mortgage company’s loan products. While some are requiring a 620, others are requiring a 680 and banks like Chase are requiring a 700. Yikes!
Down Payment & Closing Cost Assistance: Many of the state and city’s soft second and bond programs have been suspended indefinitely. Partially because many of the government workers have been furloughed or assigned to other more pressing tasks during the epidemic.
Open Houses, Home Showings: Virtual EVERYTHING is the new wave. As if technology wasn’t getting annoying enough... (insert eye roll here) now we’re having to rely on our phones and computers even more. You’ll see Realtors hosting open houses on their Facebook and IG accounts so that prospective buyers can enjoy a “personal tour” from the comfort of their couches. Realtors may also opt to not physically meet with prospective buyers and instead send them a video tour of their property(ies) of interest.
Market Inventory: So it’s no secret that home shopping inventory is down all across the world... but here in New Orleans, we’ve been lucky to most recently see an uptick in properties being listed. Therefore, it seems that sellers are getting more comfortable with our “new normal” and are slowly recovering from the initial shock and belief that a housing market crash was imminent.
Meetings & Consultations: Online. Online. Online. Unfortunately for me, a person who likes that “in real life” communication, I’m dying over here, y’all! Although I have happily implemented phone and ZOOM meetings as the main communication platform for my first time buyer’s consults as of late, there’s nothing like sitting with a new client and building that one-on-one relationship.
Act of Sales/Closings: Sooo your big day is finally here! You’re getting the keys to your first home but things are a bit different now. Still a celebration of course but a little less... well, “celebratory”. There are closing companies that have implemented drive through closings, closing by the ZOOM app, electronic only closings etc.
The bottom line is: Things will (mostly) return back to normal... one day... and it’s important that you’re ready for that shift. The real estate industry is expecting to see a huge real estate boom once these “Stay at Home” orders are lifted. There are people who will decide that they don’t really like their home anymore. Some aren’t going to like their spouse anymore. #TheHorror Then others will unfortunately be putting their recently deceased relative’s home on the market; and the scenarios go on and on.
So since the world is currently still “on pause”, try setting up a meeting with your chosen Realtor to discuss the state of the market currently, market projections, and most importantly - your long and short term real estate goals.
No one said building generational wealth was easy but we’ve come to learn that wealth building is necessary and highly attainable through real estate. “We gotta make a change. It’s time for us to start making some changes. Let’s change the way we eat, let’s change the way we live. And let’s change the way we treat each other. You see the old way wasn’t working so it’s on us to do what we gotta do, to survive.” I’m calling on you to do more than survive. It’s time to embrace the changes, build and THRIVE. Peace.