How COVID-19 has affected the local real estate market
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On March 21, 2020, Gov. Little announced new restrictions including a stay at home order for Idahoans. Some essential businesses were excluded from this order, and services related to the purchase and sale of real estate were among them.
Real estate agents, loan officers, title and escrow officers, and many other essential contractors and employees have been working together to get people into homes during the stay-home order.
So why were these services still deemed essential? Simply because people still need a place to live, and many contracts were in progress at the time of the stay-home order and still needed to be fulfilled.
“Business has been as usual for the most part,” Sean Finch of Interwest Mortgage said. “We have been taking extra precautions to ensure the office is safe for our employees and the public. Loans are still being processed, but electronic signing and filing is being utilized even more to keep things running smoothly. Interest rates are still pretty low. Rates are still as low as 3 percent for a 30-year fixed conventional (loan).”
Many industry experts predicted that 2020 would be a year of massive population growth for Idaho, especially the east Idaho region. And that growth has not stopped, despite the stay-home order. Many buyers are looking for homes in our region, and now, with prolonged stay-home orders in states like California, Washington and Oregon, we may see even more of a demand for homes in our area.
Why were people still buying homes during the stay-home order?
First, people need a place to live, which is likely why the governor deemed services related to the purchase and sale of real estate as essential. Another reason is that interest rates have remained very low. In fact, some buyers are still locked in at rates as low as 2.75 percent.
Using data collected from the Snake River MLS, comparing first-quarter home sales in eastern Idaho in 2019 to first-quarter home sales in 2020, there have only been increases. Sales prices have been higher despite the virus. Number of home sales has been higher. In fact, in the first quarter of 2020, sellers have been receiving higher than the asking price more frequently than the previous year as well.
Many buyers might be reluctant to make a move towards home purchases expecting the housing market to drop due to the economic climate. And while an abundance of caution is expected when purchasing a home, the decision to wait might end up costing them. Some markets might see some reductions in their home prices, but east Idaho is currently experiencing a low supply of homes and a high demand, with people moving in from other states, which typically drives prices even higher.
Although these are uncertain times financially for many, home ownership is likely still be within your grasp. Reach out to a trusted real estate professional to learn more about your options and the best timeframe to buy or sell.