Dealing with a "Frozen" Housing Market? Here Are Buying and Selling Tips
Right now, the housing market in the United States and many countries abroad is considered "frozen". In other words, government restrictions as a response to the COVID-19 pandemic has left many who were looking to buy or sell in the dust. No market is unaffected in the country; even large metro areas who previously were seeing a huge boom are seeing little to no economic activity in general. Some areas are even completely locked down, with house sales and purchases outlawed until the "state of emergency" declared by the state is called off.
In the meantime, there are several ways you can help yourself during this crisis. If you're looking to buy or sell but are scared to, here are some must-know tips before proceeding.
Know Local Laws
There are two sets of laws you should vigilantly monitor: the laws of the locality where you currently reside, and the laws of the locality in which you're looking to move. If either one has either a local or statewide "stay at home order" or similar, you may experience some hiccups at a minimum, or jailtime at worst. For example, some states are banning people from entering at the moment as they try to get the pandemic under control.
Even if you're not aware of the law, you could still be charged with violating an executive or public health order just for visiting a house you may be interested in buying. This creates a huge amount of stress and concern for potential sellers and buyers. Unfortunately, the trending solution seems to be to simply wait out the crisis. This downward trend means that the market is going to crash, and we are already seeing signs of that. Home values are shooting downwards. Some are trying to make a profit at this time, while others are simply trying to break even!
Make Sure You Can Afford Double-Mortgage
Chances are that you'll be able to find a house you'd like to purchase at record-low prices at the moment. Of course, this all hinges on your ability to "work around" the COVID-19 crisis, with things like "no contact closings" and related items. At the moment, even driving across the wrong state line could get you into some major trouble.
That's why, even if you find the perfect house for you, you will probably have to wait after closing before you can physically move in. It goes without saying that you should have enough money to pay to live in both places for a few months. This will give you enough time to ensure that you have optimal conditions before leaving, preventing a last-minute panic.
Be Extra Vigilant Regarding Scams
As always, scammers are targeting the home buying and selling industries. However, many have doubled down in their attempts, taking advantage of the fact that physical travel is more difficult than it's been in modern history in much of the country. In addition, many are afraid they may contract COVID-19, leaving them without many options.
Scammers often advertise houses at low prices in desirable areas. It can be difficult to know whether a certain home listed is a scam or not. Remember, it's safest to go through a licensed realtor whom you know and can verify has a valid license. Though it's tempting, do not use crowd-sourced housing sites like Craigslist or Facebook Marketplace. These may have some legitimate listings, but they are hotbeds for scammers.
The most common scam is quite simple. A scammer picks a nice-looking house, finds some pictures of it (and satellite images if none exist), and then posts it as "for sale". Unsuspecting buyers see the listing and that it's a great deal. Scammers then make up a reason that everything must be "no contact", such as that they are at high risk of dying if they contract the virus. There are certainly some people for whom this is the case, but a verified real estate agent should be able to assess the veracity of these claims.
What the Horizon Looks Like
There is a good amount of volatility surrounding the housing market right now. No analyst can fully predict the consequences of this on the market. The best model is simply the "Spanish Flu" of 1918-9, where house prices dipped, surged, then returned to normal. At this point, most are looking forward to that return to normalcy.
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