The real estate industry is one of the sectors that were significantly affected by the COVID-19 pandemic. Fortunately, real estate activity all over the country is picking up, with some experts even saying that now may be a good time to buy or sell a home for people who are ready.
So, is it? It depends. You have to look at your own personal readiness to buy or sell a home. Furthermore, you also have to know the pulse of the market. To help you do just that, here are the key real estate market indicators you need to watch during this pandemic.
- The number of new listings in the market
Even before the pandemic hit the United States earlier this year, the housing supply has been low. And when COVID-19 did arrive and lockdowns were imposed, a lot of home sellers pulled their listings off of the market.
Fortunately, lockdown restrictions have eased and home sellers are putting their listings back. In fact, more and more new listings have been added in the national level for the past couple of weeks. That said, the housing supply still can’t cope with the demand for homes. This puts home sellers at an advantage. This market condition is called a seller’s market.
So, if you’re thinking of selling a home, now may be an agreeable time. If you are buying, however, you might have to deal with high prices and plenty of competition.
- The demand for homes
The demand for residential real estate has bounced back since lockdown restrictions were eased and borders were opened. And there are a lot of factors that are encouraging people right now to explore their real estate options.
For one, there’s the low mortgage interest rates. Although there has been a 3.12 percent increase according to Bankrate, the circumstances are still good for people who are looking to purchase or refinance their mortgage.
Another factor that is making home buyers return to the market is the introduction of socially distant home buying steps. People don’t need to go out to look for homes as they can search for listings online. Moreover, more and more sellers are offering virtual home tours. Closings can also be done remotely.
- Local unemployment rates
When people decide to buy or sell their homes, the unemployment rate in their area isn’t normally counted as one of the factors to consider. But when it comes to measuring the health of a real estate market, unemployment is something that should be looked at closely.
Loss of jobs means loss of income, and when people become financially unstable, they risk losing many other things, including their homes. Unemployment or the possibility of being furloughed can cause prospective home buyers to postpone their plans. Meanwhile, sellers might be discouraged to list their homes for fear of a harder time finding a new home.
Unfortunately, the COVID-19 pandemic has led to high unemployment rate and jobless claims. According to the Federal Reserve Bank of St. Louis, the unemployment rate in the Gulfport-Biloxi-Pascagoula area is 7.1 percent.
- The time properties spend on the market
Another factor to consider if you are thinking of selling your home is the amount of time homes spend on the market. This is indicative if home buyers are indeed purchasing homes or otherwise. Consult with your real estate agent for up-to-date figures regarding the time spent on the market to determine if it would be a good time to sell your home.
A fast home sale is always ideal. You’ll be able to keep the selling price of your property within close range of the listing price. Furthermore, the home itself will be in great condition, relatively fresh from the preparations you’ve made.
Sellers with homes that have been on the market for longer, however, need to make adjustments. Many reduce their listing prices, decreasing their possible profit. Others have to shell out extra funds to keep the home as appealing as possible to potential home buyers. And if your home purchase is contingent to the sale of your current home, the transaction might not push through.
- Home prices
Home prices are another key indicator, not just of the real estate market, but of the economy as a whole.
For an economy that is slowly coming out of a recession, rising home prices can be a sign of a recovering market. There are a couple of reasons why, but mostly it has to do with people having more money to spend as well as real estate appreciation. Rapidly rising home prices, however, can signal some market imbalances.
What about low home prices? They’re not always as good as they initially seem. Decreasing home prices might indicate real estate depreciation. And for investors and people whose main source of wealth are their homes, they stand to lose a lot.
Understand Gulfport MS real estate better
Make informed decisions. Work with top real estate agents in Gulfport MS to get a better grasp of the local commercial real estate market. Connect with the team at Owen & Co. Real Estate today by sending an email to info(at)owenandco(dotted)com to learn more.
