In these uncertain times, it’s hard to know where things are headed with the local housing market. There are many different theories and speculations. But what may be happening in some cities and states, isn’t necessarily what’s happening here in the Austin metro. Even within the Austin metro area, different parts of town have different reactions to market conditions.
One thing is for sure, there is no sense in driving yourself crazy about your home’s value if you aren’t planning on moving anytime soon. Property tax bills just came out, but those are paid in arrears, so fighting this tax bill based on today’s conditions probably won’t get you very far. Next year may be different. However, that’s not to say that you shouldn’t protest if you feel that your home is valued too high. Feel free to reach out to me for comps and market info.
If you are thinking of selling or buying, take some time to evaluate your budget, timeline, interest rates, local inventory and all the pros and cons long term and short term. Don’t listen to the national news and try to make a decision that is very personal and very local. Buying generally does need to be a long term decision if it’s your primary residence. If you might need to sell next year or even in a few years, now may not be the right time to buy. If you are an investor and you are thinking of flipping or making it a rental, your strategy will be different. There are a few deals to be had, but it’s no 2008-09. As a seller, looking at your current competition will be important. Preparing your home for sale and pricing it right is just as important as ever. In Cedar Park, buyer demand is still high, but buyers are still looking for value and good condition.
Mortgage rates are still historically low and home inventory is also very low for this time of year. There is still high demand from buyers in the Cedar Park area, although maybe not as many as usual due to stay at home orders and uncertainty. However, I would say in the Cedar Park market, demand is still greater than supply and we are still seeing multiple offers for properties that show well and are priced right. Homes are being listed and sold.
If you are thinking about selling, now is actually a good time to sell since there is limited inventory and we have not really seen a reduction in prices. Showing your home can be a little tricky with COVID, but we have ways to handle it with virtual tours, video walkthroughs, 3D floor plans, etc. Luckily my business model is already focused on online marketing, virtual tours, paperless transactions, etc. so I’m already set up to handle virtual selling. Buyers are still getting out and seeing homes in person with a cautionary approach. Most buyers out looking right now are serious buyers with a need to buy. Buyers and agents are taking separate cars, wearing masks, gloves, shoe coverings and using plenty of hand sanitizer and Lysol. Vacant homes are easier to show, but occupied homes are being showed too with extra precautions for the homeowners and buyers.
Lending markets have seen some delays in closings due to delays with recordings, appraisals and other third party vendors. But generally loans can be closed within 45 days or sooner. VA and FHA may have more delays. Appraisals are leaning to the conservative side, so pricing is very important.
The long term outlook is what we are all speculating about. Most are expecting the recession to be short but deep. But the reality is that a lot is dependent on the job market and that can even vary locally. There are a lot of industries and jobs not really affected by this crisis and there are a lot that are deeply affected. In our consumer and service driven economy, it’s going to depend on how those sectors bounce back. Things will definitely be changed forever. How we adapt and respond is yet to be seen.
As the economy relates to housing specifically, it will depend on how many affected people are homeowners or even landlords. The last recession was a result of the housing market and fishy lending practices. This time, the housing market will be affected but it will be based on individual job losses in different areas, equity positions and overall health of the local market. Will we see a lot of foreclosures? It all depends. There are many people with a lot of equity thanks to the last 10 years of growth. There are many investors who bought after the last recession who may be cashing out soon. This might mean a tougher housing market for tenants. Will that create a large supply of inventory that will drive down prices, or will it just be a welcome supply to fill the demand for first time buyers or maybe even other investors? We will have to wait and see.
People who bought more recently, who also face job or income losses, may be affected more since they won’t have equity to cushion the blow. Some may work out agreements with their lenders, some may not. In my opinion, we may not see the true affects of this crisis in the housing market until late this year into 2021.
Those who have unfortunately lost their job or businesses may be able to keep their homes by working through it with their lender, but beware of options given by the lender and read the fine print. It’s not as easy as it was first made out to be. Call me to discuss the options given to you, I may be able to give you some insight and things to consider. Keep in mind, a forbearance may only buy you some time, but may add a large “balloon” payment months down the road. Every lender has their own way of working through this, so make sure you understand exactly what you are agreeing to before entering into any new agreements with your lender.
The reality is that each situation is different. It’s impossible to paint a one size fits all scenario. If you are a buyer, seller, investor, landlord or tenant, you see the market through your own eyes and your own situation. If you have concerns, are trying to make a decision or just would like to know where you stand in today’s market, let’s talk. I’m here to help and have an honest, straightforward discussion to help you make the best decisions for you and your family.
Give me a call at 512-966-6540 or drop me an email clegrand@cedarparktxliving.com
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