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      07-23-2020, 08:44 AM   #1
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Why has the housing market remained strong despite the pandemic?

I have many friends in real estate and from what I have heard and scene, the housing market is still on fire.

This is quite surprising to me considering the current unemployment situation, and everything with the virus.

How can there still be a high as ever demand when we have high unemployment and a recession?
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      07-23-2020, 08:47 AM   #2
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People just are not selling and the mass defaults on loans haven't started yet.
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      07-23-2020, 09:04 AM   #3
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I live a sub-rural area and our local market had a lull in April - May but is just as strong as ever now. Lots of houses being listed and sold within 48 hours. A neighbor took an offer for over asking price the same day it was listed.
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      07-23-2020, 09:19 AM   #4
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Quote:
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I live a sub-rural area and our local market had a lull in April - May but is just as strong as ever now. Lots of houses being listed and sold within 48 hours. A neighbor took an offer for over asking price the same day it was listed.
Yeah, same situation here in Dallas, TX

Makes me wonder if we are really in a bad economy. Friends in other sectors say spending is still up as well.
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      07-23-2020, 10:06 AM   #5
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Forbearance keeps people stable for now. Less inventory keeps prices healthy.

How long it will last is anyone's guess.
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      07-23-2020, 10:23 AM   #6
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Do you guys think it's because people are starting to barely reach into their savings? Or going to at least?

I'm a 30 year old looking to buy my first home (well, condo) here in San Diego. I sold my truck and motorcycles at the start of this pandemic in hopes that the market will drop and I can get into my own place. However, here we are at the end of July and nothing, yet.
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      07-23-2020, 10:26 AM   #7
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Many of the unemployed are not the same as those home shopping. There was an effect everywhere, but disproportionate on lower income - restaurant workers, hotel and travel-related workers, retail, etc. So if the people with the financial capacity to buy are secure (or risk-takers), with pent up demand from a couple of slow months, and rates are ridiculously low, except sales to be strong.
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      07-23-2020, 10:54 AM   #8
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The high unemployment is for certain sectors only and frankly not people who were in the home buying market anyway. Lots of people took hits of course but most in the home buying market are probably still working and earning most their income.
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      07-23-2020, 11:00 AM   #9
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1. Babies keep being born, the darn things. I wonder how that happens?

2. Housing is generally tight across the US which means there is barely enough supply to meet the increasing demand. See point number 1, above.

Lesser factors: homes demolished or deemed not suitable by virtue of condition or location based on changing consumer requirements, think of it as trapped or inaccessible supply. This reduces supply. Immigration into the US is a slight strengthening factor for demand.

Conclusion: people need places to live. When supply is short or tight, as it is, price action and transactions are brisk, as they are. The only way to alleviate this is through new home construction, which is also strong.
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      07-23-2020, 11:04 AM   #10
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Most states have restrictions in place on foreclosures, banks too IIRC. Also the extra $600/week unemployment boost has doubtless helped. A lot of that stuff is set to end, which may mean changes are coming for the housing market.
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      07-23-2020, 11:15 AM   #11
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It depends on the city/area, for example NYC housing is struggling.

Lots of people are seeing this as an opportunity to change lifestyles and are moving around the country. A good amount of people are moving to "smaller" cities and suburbs.
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      07-23-2020, 12:18 PM   #12
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The historic low interest rates and desire of city folks to get out of the virus/protest/war zone has seem housing prices up here in the sticks almost doubling since the spring!

I was in a town committee meeting last week, and someone reported that there were 148 houses under contract in our town...with only FOUR listed as for sale and not under contract yet. Supply and demand, pure and simple.....
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      07-23-2020, 12:30 PM   #13
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Might be able to snag a deal or negotiate a rent reduction on NYC apartment rentals currently.

Suburbs around the area are hot though, as expected. A few days ago, we made an offer (at asking) only to be "outbid" by another buyer who made the same offer but all cash for a house in the burbs. Bummed/annoyed.
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      07-23-2020, 01:22 PM   #14
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i been browsing the housing market, some properties start at high price and within few months price drops $20k-$40k....or disappears from listing and gets relisted at lower price. We will be first time home buyers, gladly accept any advice or recommendations.
Our credit is excellent, only debt is car payments.
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      07-23-2020, 01:35 PM   #15
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Quote:
Originally Posted by IndyRed128i View Post
Yeah, same situation here in Dallas, TX

Makes me wonder if we are really in a bad economy. Friends in other sectors say spending is still up as well.
You're joking right?
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      07-23-2020, 01:40 PM   #16
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Originally Posted by nyalpine90 View Post
i been browsing the housing market, some properties start at high price and within few months price drops $20k-$40k....or disappears from listing and gets relisted at lower price. We will be first time home buyers, gladly accept any advice or recommendations.
Our credit is excellent, only debt is car payments.
My wife and I just bought our first house last year.

My biggest suggestion is to find a trustworthy 3rd party realtor. Ideally one that isn't associated with the seller realtors. They will help you really understand the process, point out things you should be looking for and to avoid, etc. It doesn't cost you anything since they get commission from the seller. And don't be afraid to walk away from a realtor you started working with if they don't jive with you.
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      07-23-2020, 01:42 PM   #17
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This still remains the BEST investment overall one can make... Period.

And with these historically low rates, I'm adding more to the portfolio.
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      07-23-2020, 01:46 PM   #18
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Quote:
Originally Posted by dsad1 View Post
It depends on the city/area, for example NYC housing is struggling.

Lots of people are seeing this as an opportunity to change lifestyles and are moving around the country. A good amount of people are moving to "smaller" cities and suburbs.
It depends where in the city. I listed the day real estate opened up the end of June. I had non stop showings for 4 days straight and accepted an offer on the 4th day. Got my price too. I thought I listed high. I'm kind of suburbia for NYC. Tree lined block, 60' x 100' lot, in ground pool. My buyers came from Brooklyn.
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      07-23-2020, 01:58 PM   #19
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Quote:
Originally Posted by nyalpine90 View Post
i been browsing the housing market, some properties start at high price and within few months price drops $20k-$40k....or disappears from listing and gets relisted at lower price. We will be first time home buyers, gladly accept any advice or recommendations.
Our credit is excellent, only debt is car payments.
Quote:
Originally Posted by jmack View Post
My wife and I just bought our first house last year.

My biggest suggestion is to find a trustworthy 3rd party realtor. Ideally one that isn't associated with the seller realtors. They will help you really understand the process, point out things you should be looking for and to avoid, etc. It doesn't cost you anything since they get commission from the seller. And don't be afraid to walk away from a realtor you started working with if they don't jive with you.
^This. The sellers agent works for the seller. A realtor will know the market, do comps so you know what to offer. IF homes are priced right they will go quickly. Some throw out high numbers only to have to reduce them
Do your homework too. Look at Realtor.com and Zillow to see what is on the market in addition to the realtor giving you suggestions. Go get yourself a preapproval so sellers know you qualify and are serious. Good luck.
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Last edited by cmyx6go; 07-23-2020 at 02:55 PM..
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      07-23-2020, 02:06 PM   #20
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Quote:
Originally Posted by cmyx6go View Post
^This. The sellers agent works for the seller. A realtor will know the market, do comps so you know what to offer. IF homes are priced right they will go quickly. Some throw out high numbers only to have to reduce them
Do your homework too. Look at Realtor.com and Zillow to see what is on the market in addition to the realtor giving you suggestions. Go get yourself a preapproval so buyers know you qualify and are serious. Good luck.
correct. we were told to get preapproval, just to go see a house.
how the hell do you get an idea of how much of loan you can get approved.
i been playing with online calculators..trying to get an estimate.
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      07-23-2020, 02:20 PM   #21
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correct. we were told to get preapproval, just to go see a house.
how the hell do you get an idea of how much of loan you can get approved.
i been playing with online calculators..trying to get an estimate.
Have you set a max budget for the home purchase and down payment? Try to preapproved for an amount 10% or so higher than what you plan to finance to provide some cushion. There are rules of thumb. I think lenders want to see you use less than 28% of pre-tax income on mortgage payments and something like 36% for all debt.
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      07-23-2020, 02:55 PM   #22
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Originally Posted by nyalpine90 View Post
correct. we were told to get preapproval, just to go see a house.
how the hell do you get an idea of how much of loan you can get approved.
i been playing with online calculators..trying to get an estimate.
My bank told me the maximum we would be pre-approved for. This will be drastically higher than what you can realistically afford. But from that number you can figure out approx monthly mortgage payments, down payment, and closing costs. Then set an ideal house cost and a maximum house cost you can afford.
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