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I got this article from Hazel Bridges and I think this makes wonderful points:
“There’s no denying the profound impact that COVID-19 has already had on society and the economy. And with the ongoing spread of the virus breeding uncertainty across the country, even experts are having a hard time predicting what the future holds for the next several months, much less the next few years.
With talks of an impending recession circulating through the media, many would-be home buyers are being turned off at the prospect of making such a significant investment at a time like this, particularly seniors. And while there are legitimate concerns to consider, that doesn’t mean that buying a home right now is a bad idea if you’re in your golden years.
Whether you are thinking about purchasing your first home or acquiring an investment property, don’t just assume that you must hold off until the pandemic is over. Below you will find some information and tips worth considering.
Consider the Advantages
Perhaps the greatest advantage of purchasing a home right now is the low interest rates. In fact, interest rates are historically low. And instead of leveling out, the market seems to be getting friendlier to buyers each day. And even when it does level off and the pandemic is significantly slowing down, the economic fallout of the previous months may suppress demand, which will reduce sale prices of homes.
During any type of financial hardship, a lot of people turn to selling their homes in an effort to avoid foreclosure, which can do significant harm to their credit, among other things. As a result, you might be able to buy a home for much less than it’s worth, and the transaction will likely go through much quicker than normal. Nonetheless, remember that location is still essential, so be sure to research the housing market in your desired area to ensure you are getting the deal that you think you are.
Consider the Disadvantages
Of course, there are downsides to purchasing a home during a recession. For example, when a bank or other financial institution is involved in the process, you will not have the same freedom to negotiate as you would if it were just you and the seller. Plus, foreclosed homes are typically sold as-is, meaning that the bank will not pay for any repairs to be made or provide you with repair credits.
If this is your first time buying a home or even your first time investing in a second home, you might find it more difficult to get a mortgage since lenders tend to tighten restrictions in times like these. Also, a greater number of investors are likely to be in the hunt for low-priced homes that they can flip later, meaning more competition for you. Moreover, homes bought in a recession often take longer to appreciate in value.
Assess Your Situation
Whether purchasing a home during a recession is a good idea really depends on your specific financial situation. If you have reason to be confident about your job security for the foreseeable future and/or you have the financial means to be patient with value appreciation, then now could be the ideal time. However, if you still work and your industry is susceptible to layoffs, or if you don’t have retirement savings or other types of investments in place, you may not want to risk it and end up with a mortgage that you can’t pay.
If you’re in the market for a new home, don’t let assumptions keep you from landing a great purchase on a property right now. Go through the pros and cons of buying a home during a recession, and evaluate your situation to determine whether a home you’re interested in is worth it. You don’t want to make a costly mistake, but you don’t want to miss out on the deal of a lifetime, either.”
If you need some advice about your home (buying or selling), please call me for a free, no obligation consultation. I want to help you save money.
Steve Morin, Real Estate Express, Broker/Owner