Buying a Home in 2020? How to Navigate a Changing Landscape
Sheltering in place. Working where you live – and vice versa. Walking and bicycling. Cooking and eating in instead of dining out. The 2020 housebuying and selling season begins with some significant shifts in Americans’ homebuying priorities during the coronavirus pandemic. As portions of the country emerge from widespread stay-at-home recommendations, the housing market will see pent-up demand meet low inventory. And while mortgage rates are low, lending requirements are evolving.
Whether you were already looking to move prior to the crisis, are rethinking where you want to live due to its effects, or want to relocate for financial or work reasons, having a plan and knowing what you want will be critical to landing in the home that’s right for you.
Different Needs for a Changing World
From kitchen-table schools to spare-room workplaces to basement gyms, barbershops and beyond, this has been a year in which our homes filled more roles than many of us ever imagined.
And it’s changing how people search for places to live: U.S. News & World Report recently explored several new priorities that will drive home searches, such as a newfound appreciation of natural light, and the need for individual space and privacy. There’s high interest in family-accommodating eat-in kitchens, pantries and cabinets with generous capacity, as well as energy efficiency that will help reduce utility costs.
Tech-ready homes are also likely to be in demand as companies offer more at-home opportunities for office workers, and as in-home entertainment like internet streaming services grows. Hardwired internet and Wi-Fi connections – along with an abundance of electrical outlets for powering and recharging everyone’s tablets, phones and Bluetooth® speakers – are strong selling points. So are smart home technologies that enable remote control of things like thermostats, lighting and home security.
Put in the Prep Time
With far fewer home listings expected this season – real estate company Redfin noted new-home listing declines of 33% and 50% at the beginning of April and May compared to 2019 – it’s important to equip yourself with as much knowledge as possible ahead of time. Know the market you’re looking in by researching home values and demand, and try to get an idea of how long homes are staying on the market, as well as their sale prices. According to Realtor.com®, for instance, the Allentown, Pa., metro area saw an 80.5% year-over-year drop in new listings, accompanied by a 20% drop in days on the market, and a 10.6% increase in median sales price.
When you find a home you’re interested in, be prepared for a quick process. Many potential buyers are conducting searches entirely online, including virtual tours, and you’re unlikely to have the luxury of a longer, more relaxed negotiation process.
Remote Possibilities, Online Options
You might be surprised at how much of the homebuying process can now be done remotely, including virtual tours, "drive-by" appraisals and even online closings. Open houses broadcast on Facebook Live and panoramic, 3D photo explorations are growing in popularity, for instance. Redfin observed recently that in the last weekend of March, 30% of all home tour requests it received were for live video tours. Zillow also saw dramatic growth in the creation of 3D tours, according to Curbed.
The due diligence period – during which a buyer gets a house under contract but has the opportunity to identify potential problems with a home prior to closing – is also changing. Appraisals may be conducted through no-entry walk-arounds combined with public information and data, or home inspectors may use video chat services to do walk-throughs with nobody else there in person.
Even closings may be handled using an electronic signature system or remote online notarization where available. Convenience doesn’t necessarily equal simplicity, though, so be sure to ask real estate agents about their experience with remote sales.
Know Your Numbers
All of this points to the importance of getting pre-qualified for a mortgage: Not only will the process help you understand what you can afford, but it will also show sellers that you’re serious about making the purchase, and ensure things move as quickly and smoothly as possible. KeyBank’s mortgage loan officers make this valuable step an easy part of the journey.
Online mortgage resources are available, including tools to help you find your price range, taking into consideration interest rates, loan terms and down payment. And remember to build in room for utility bills, repairs and maintenance, property tax and homeowners insurance. Even in a tight market, you don’t want to exceed your budget – and you’ll want to have a buffer for surprise expenses.
While there’s sure to be competition out there this homebuying season, knowing your local market, determining exactly what you want out of a house and getting pre-qualified for a mortgage you can afford will all give you an edge. Happy hunting!