The Coronavirus Pandemic is more than just a virus that impacted our physical and mental health. We hear about the lasting effects catching this virus can cause to our bodies but it also has long-lasting effects that range outside of our physical well-being. Economically this pandemic has set off a chain of events that have both positively and negatively impacted the financial world. Primarily what most people seem more focused on is the housing market boom that has left buyers struggling to find a home and sellers making enormous profits far from what they had originally invested.
How Is This Market Currently Going?
It can be said that the housing market has been heavily influenced by the government’s efforts to avoid the inevitable recession during all the federal and state lockdowns to contain the virus. To keep consumer purchasing up during the pandemic, a provocative mixture of low-interest mortgage rates along with multiple stimulus packages have kept house hunting at a strong forefront in our economy. What we are currently seeing is the wave of new generational homebuyers that the federal government is encouraged to purchase homes with federally assisted down-payment assistant plans. Buying a home has become easier for most to access in the sense of obtaining loans through conventional lenders.
But Why Are Home Prices Increasing?
The increase in housing prices can be attributed to many aspects that have formed since the start of the pandemic. Primarily that there is a new influx of interested homebuyers, but also we find ourselves in a housing shortage. A caveat to this economical boom can be correlated to another ramification of the pandemic in the sense of the eviction moratorium that protects renters from being evicted due to lack of rental payment. The displacement of many out-of-work Americans has left them unable to afford rent and, in efforts to ease the financial toll of pandemic-related shutdowns have caused, the federal government has protected renters from being evicted. So how does this relate to the housing shortage? Well, in short, it’s a simple cause and effect chain that puts everything in limbo. Landlords/Property Owners are not able to collect rent on their properties and in turn, have not been able to pay their mortgages. Not only that but while the moratorium is still in place, these properties cannot be emptied or listed for sale.
The small number of available houses are often led to bidding wars amongst buyers putting way more than the already inflated asking price. The housing market is in a very competitive state at the moment where sellers are benefitting the most. There are plenty of incentives at the moment for both homebuyers and home sellers. If interested in getting more information on buying or selling a home, as a Bucks County realtor, I can help guide the way.