COVID-19’s Impact on Real Estate
This column is part two of an ongoing article that explores the impact COVID-19 is having on the local real estate market.
Like many people who are wondering when things will get back to normal, we Realtors are also asking ourselves this question on what seems like a daily basis. We got a sigh of relief the last two weeks when in-person showings were approved to resume. This is big news because although they are limited to three people per showing and social distancing rules still apply, we can at least start to interact again.
Although open houses, Realtor tours and large gatherings are still prohibited, it feels like we are on our way in the right direction. Regarding activity, we are seeing new listings hit the market, and properties go under contract on a daily basis here in the Roaring Fork Valley, which instills optimism as we enter our busy summer selling season.
I wanted to take an opportunity to explore some ways to let your real estate work for you during these uncertain times. Whether you are tight on cash, worried about losing a job, or simply want to cut the fat from your expenses, there are some really good options available to you that might be worth exploring. Interest rates are at all time lows (3.125% on a 30 year fixed as of last week) allowing you to get creative with borrowing. A traditional refinance might make sense if you have no plans to sell your home in the near future and currently have an interest rate higher than 4%. If you have a lot of equity in your home and also have no plans to sell in the near future, a cash-out refinance might be the best solution for you. I had a client recently take $100,000 out against their home in a cash-out refinance, and their monthly payment increased by only $300 per month because of how low rates are. Lastly, a Home Equity Line of Credit (HELOC) or Home Equity Loan might be best for you if you are thinking about making some improvements with all this extra time at home.
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If you are looking for a less permanent solution, you may consider adding a roommate or creating a lock-off unit on your property to generate some income and subsidize your mortgage payment. For many folks, their home is the biggest asset in their lives, so depending on the circumstances, it might make sense to leverage that asset during these times and ensure you will get through smoothly without any major financial disruption to your life.
On the contrary, if you were thinking this was your year to buy or sell, don’t be discouraged as I have some good news for you as well on why this can still be your year to make a move.
Sellers: With all this extra time at home you can finally accomplish those small projects and get your home ready for market. Our inventory levels locally are low creating an opportunity for you to appeal to more buyers than usual this time of year. Lastly, data shows people are spending more time than ever browsing real estate websites looking at listings and with the new norm consisting of virtual tours, we are seeing buyers confident enough to make offers without even setting foot on your property.
Buyers: Interest rates are at historic lows and in some cases, sellers are more motivated than ever before to make a deal. Make sure you are pre-qualified and working with your Realtor to get educated on the inventory because when you find the right house, you need to be able to act, otherwise it might be too late.
Shawn Manwaring is a Broker Associate with Roaring Fork Sotheby’s International Realty in Glenwood Springs.
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