2020 started much like any other year, and no one could have predicted the turn of events we experienced. The pandemic necessitated protocols that brought about movement restrictions to prevent disease spread. The housing market was not immune to disruption. Real estate investors are currently itching to know if it is a bad idea to buy a home during COVID.
Over 40% of Americans work from home, and there is a rising need to create a proper work area. Home prices are on the rise, giving the impression that people are in the market for more space. Going with this trend might push people to buy a house now, but it could be a bad idea for these reasons:
- You are not certain if working from home will be permanent or who could be a downsizing target.
- Movement restrictions are causing delays in project delivery.
- You may have to purchase property without seeing it in person.
There is really no answer that works for everyone since all situations are different. However, here are some things you should consider before making a decision.
- Is Real Estate an Essential Service
Some regions consider real estate as an essential service. This implies the continuation of selling and buying of houses, although in a modified way. If the area you want to buy does not regard real estate as an essential service, you have to pause plans until restrictions are over.
- State of Finances
For most people, 2020 has not been the easiest year economically. By the middle of May, the unemployment rate increased to 14.7%, which is the highest since the Great Depression. If you have somehow managed to escape the economic hardship, there are still important points to note:
- Has there been any negative impact on your income, and what are your near-future projections?
- Is your current place of work stable?
- Does your industry seem to be faring adequately?
- Are there any savings available for setting your down payment and closing costs? Do you also have emergency funds to stay afloat in case of any financial issues?
It would be a bad idea to buy a home during COVID even if your employment is stable when the home you want is stretching your budget. You might need to scale back, but there is almost nothing worse than settling for a home you are not crazy about.
Prospective buyers with credit scores at the bottom of the approval range should rethink buying a house before the pandemic.
- What Does the Local Market Look Like
In many markets buyers could find it hard to resist deals at this time. Though markets vary in how much they have been impacted by coronavirus. It is a great time to buy homes in high price ranges because it is easy to negotiate. However, for listings under $275,000, there is a lot of buyer competition. This means that buyers who want to sell their homes and move up the price range will find this period favorable.