Coronavirus and The State of the Real Estate Market
Should You Buy a Home During the Coronavirus Pandemic?
The coronavirus is scary. But those willing to enter the housing market have the benefit of low rates — and the wisdom of those who bought during the last crisis.
Your down payment fund was safely in cash. You’d planned, perhaps for years, for the 2020 home-buying season. Then, just as the perfect home hit the market, the coronavirus turned the world on its head.
Whatever it is that is happening now hasn’t hit the housing market yet, but it probably will. Stocks have fallen, entire industries are putting themselves on pause and all manner of small businesses are taking hits.
All that may make it seem like an odd moment to consider buying a house. But there will be many people who are confident about their job security — or moving for job offers that haven’t evaporated. There will be others making room for new family members or looking to be closer to older ones who may need care.
Read the full article here: https://www.nytimes.com/2020/03/13/business/buying-a-home-coronavirus.html?auth=login-google
Should you go through with the purchase?
As you have probably already heard The Fed’s lowered the FEDERAL RESERVE RATE. The federal reserve rate is a interbank lending rate. While it has an indirect impact on rates, it is not directly impacting mortgage rates. Rates may go up and they may go down. All depends on how Wall Street and world markets react to this move. If the markets see this as helping it will likely improve the stock market. If the stock market improves (people invest in stocks) typically the mortgage rates get worse (higher) as less money is being invested into mortgages.
This is not done to make mortgage rates improve. While that may happen it’s not the intent. This is done to help bolster the entire market (stock and business borrowing in general)Build equity and make money cheaper. Not for home loans…..which is controlled mostly by the Mortgage Backed Securities Market. (Not the Federal Reserve)
If the Feds wants to lower mortgage Interest rates (as they did after the housing crises) they will begin buying MBS and Treasury Securities to lower the 10 year treasury rare and mortgage market.
CORONAVIRUS FORCES CULTURE CHANGE IN REAL ESTATE
As new restrictions on American life, including extensive closures of schools, restaurants, and bars in cities across the country, exacerbate the efforts surrounding the prevention of the spread of the coronavirus, real estate brokerages are adapting their businesses and preparing their clients for what could be a chaotic few weeks or months ahead in the housing market.
Some companies are instituting policies against holding open houses for the time being while others are sticking to business as usual but with extra precautions, such as adding sanitation stations to listed properties. The federal government has taken recent action to shore up the economy against the threat of the virus, with the Federal Reserve cutting its benchmark interest rate to zero. Such moves have helped push mortgage rates to record lows, but while that seems enticing for more prospective home buyers to enter the market, escalating efforts to encourage Americans to self-quarantine could stop those would-be buyers in their tracks.
Potential buyers thus far have appeared resilient in the face of panic. ShowingTime, which collects data on the nearly 1 million showings scheduled through its system nationwide each week, has begun tracking the potential impact of coronavirus on home tours. “Looking at the data so far this year, we have not yet seen a significant drop in national buyer activity,” ShowingTime reports. “There may be future effects of COVID-19, so the situation will be monitored closely. At this time, it seems most buyers and sellers do not regard seeing a few individual homes with their agent as a significant risk.”
Read the full article here: https://magazine.realtor/daily-news/2020/03/16/coronavirus-forces-culture-change-in-real-estate
HOMESELLERS’ UPDATE
A Message From MAR – Smoke and Carbon Monoxide Inspections During State of Emergency
We understand that some fire departments are halting their smoke and carbon monoxide inspections during the state of emergency. MAR is currently in discussion about how to ensure that scheduled closings can still occur in the absence of a certificate for a smoke and CO inspection. We want to take this opportunity to assure that the MAR Advocacy Team has been working aggressively on this issue. We have been in constant discussions with the Baker Administration and are working towards a solution that will allow transactions to continue throughout the state of emergency.
As of Friday March 20, The Governor of Massachusetts, pursuant to his Executive Authority during this declared state of emergency, has signed an executive order affecting the temporary deferral of smoke and CO inspections required by M.G.L. Chapter 148 Section 26F and 26F ½ .
Sincerely - Massachusetts Association of REALTORS®