Most people expected a downturn in Maine’s real estate when the pandemic hit in March. There was a pause as buyers and sellers alike decided to wait until there was a clear direction in the economy. That direction is not yet clear, and remain cloudy for some time. However, real estate prices have held firm, and in some cases, buyers are paying premiums over asking price. Sellers are reluctant to have buyers in their homes, so generally, they are waiting. Yet, the buyer pool, already large, is swelling to a point that would seem to belie the circumstances we are in today. An indication of this is the record volume of mortgages reported by Residential Mortgage Services for May, despite higher FICO score requirements. They are expecting that record volume to continue at least through June.
Many folks in Boston and other cities who have the means are more anxious than ever to escape to safe havens like Maine. Several industry reports indicate that this may be the best time to sell. The National Association of Realtors reported last week: “The pandemic isn’t scaring off home buyers. More than half—or 53% of about 1,000 home buyers recently surveyed—say they are more likely to buy a home in the next year due to the coronavirus outbreak. First-time homebuyers and millennials may be the most eager to buy within the next 12 months, the survey from LendingTree shows.”
Also, this NAR statement is telling: “Home shoppers may be growing more comfortable with the idea of buying a home sight unseen, too. Three in 10 buyers surveyed say they’d purchase a home without physically touring it in person. Also, about six in 10 homebuyers say they’ve toured a home virtually over the last two months.”
As noted above, some lenders are wary: “But a potential roadblock to buying a home could be qualifying for a mortgage… Lenders have reportedly tightened credit access during the COVID-19 outbreak. Access to mortgage credit dropped by 12.2% in April, according to the Mortgage Bankers Association.”
The commercial side of the market promises to be very different. Since the hospitality industry has been brought to its knees, there is likely to be a flood of properties and businesses for sale in the coming months, and other classes of property proliferating “For Lease” signs. Those who are financially able to weather the storm will find opportunities here. Others will be forced to sell at steep discounts. Most credible economists predict it will take years to unwind the tangles brought on by this pandemic.
If you are a homeowner considering selling, this is probably the best time to get the best price before the residential market is flooded with sellers. Not being part of the crowd is a good thing!