‘Caught in the frenzy’
An unprecedented real estate market in the midst of a pandemic
Like many things in the past year, the real estate market has taken a crazy turn that has not been seen in decades.
The demand for homes right now is incredibly high, but the number of homes being sold is incredibly low. Compared to last year, home values have risen 10% while interest rates have remained low. This combination has yielded a real estate market that was unanticipated a year ago.
Harry Cross, of Cross Realty in Suffolk, hasn’t seen anything like it in his 48 years of real estate. He described the selling process almost like an auction. There will be multiple offers for one home, and the seller will give a deadline for the best offer.
Buyers will offer more than the selling price, cover the closing costs, pay $5,000 more than the appraisal, not get an inspection — which Cross does not recommend — give the seller more time to move and agree to other conditions buyers in the past would never even consider.
“If buyers aren’t careful, they can get caught in the frenzy of making an offer and make a poor financial decision,” said Cross. “Buyers need to listen to their agents to make a good business decision.”
According to Darlene Smithwick at Century 21 in Franklin, she once went to show a house that had 23 showings that day. She ended up skipping it and moving on to a different one.
“This has been a hard time for buyers,” said Smithwick. “Prices have gone up so much that some have chosen just to rent.”
Even though buying a house is very competitive and challenging, it is not entirely hopeless.
“Interest rates are still low right now,” said Domenick Epps, of Victory Allegiance Realty in Suffolk. “It’s still a good opportunity for buyers. They just need patience.”
This craze is also in light of the foreclosure ban put in place due to the pandemic, putting many out of work and no longer able to pay their mortgage. Once the ban is lifted either this fall or winter or next year, Epps sees an influx of foreclosures changing this odd dynamic.
Cross believes that once the pandemic starts calming down and people start feeling comfortable to sell again, the market will start leveling out, as many are apprehensive about selling and having strangers in their house for tours with the pandemic still ongoing.
According to Epps, it’s been a challenge for agents, as many preapproved buyers are looking for homes, but not enough homes are for sale. This has made agents be creative to get offers accepted.
For those thinking of selling right now, there is only one piece of advice — do it. The sellers are in the driver’s seat right now and can make a good profit. According to Smithwick, those selling to buy may not come out as lucky, but those selling to downsize will come out well.
“My advice for anyone thinking of selling right now is, stop thinking and do it while it’s hot right now,” said Epps.
For those looking to buy, Smithwick encourages people to get prequalified and have all their papers in order, because in the two days it could take to get qualified, someone else could snatch the house out from under you.