Is Now a Good Time to Buy a (Second) Home?
Spring is always a welcome sign that warmer weather is on its way, our gardens will soon be blooming, and “for sale” signs will inevitably pop up all across town. Thankfully, many of us are experiencing more ideal temperatures and relishing in the fruits of our gardening labors, but the housing market isn’t quite looking like it normally does this time of year.
“Buyers will find a more limited selection available right now, as we've seen active listings fall to record lows on Zillow, so it might be harder to find the perfect fit,” says Jeff Tucker, an economist for the real estate database company.
But does this mean potential buyers should pause their shopping for a new or second home? A recent Gallup poll finds Americans are evenly divided on the subject. We asked real estate agents around the country about their experiences showing and selling homes in this unprecedented season of life and how it’s shaping buyer behavior for the future.
Home Buying in the Midst of a Pandemic
“The top question buyers are asking right now is when the market will be back in full force,” says Becky Gray, a real estate agent with Realogics Sotheby’s International Realty in Washington State. “I’m also fielding many inquiries surrounding the way in which current conditions are impacting pricing and when we’ll be able to return to traditional in-person home showings.”
Gray says she and her team have had great success implementing virtual tours and have worked proactively as social distancing measures were put in place to ensure guests can get the best home-buying experience from the comfort and safety of their current home.
She is noticing a trend: Some buyers and sellers are pausing to reevaluate their long-term goals over the next 60 to 90 days in hopes that this crisis will simmer down. However, she says there are still buyers out there at all price levels looking at homes across Sotheby’s vast portfolio, many of whom are second-home buyers looking to purchase in feeder markets so that when they are able to travel again their home will be ready and waiting.
“We’re seeing success in showcasing our luxury lifestyle videos across our digital platforms, like YouTube, WeChat, Facebook, and Instagram,” Gray says.
Ryan Jacka works on the other side of the country with Sotheby’s East Hampton Brokerage, and he says the top home-buying considerations right now are whether the market is good and if now is a good time to buy that second home.
“Rental prices are increasing, while the inventory is drying up, mortgage rates are low, and I believe people are rethinking how they live,” Jacka says. “More than ever before, it seems like people are desiring space and nature for the sake of their mental health and well-being. More people are envisioning how they can work more from home longterm.”
Shifting Priorities
“Shelter-in-place has and will forever change the way we see our homes,” says Chase Racich, a real estate agent with Sotheby’s San Francisco Brokerage. “The value of privacy and personal ‘sacred space’ has increased tenfold in light of our recent pandemic. What once was considered a bonus is now being considered essential.”
Racich says with exterior space keeping most of us sane in these times of isolation, he’s seeing people looking for more outdoor room to create an oasis at home. He says one of his hottest properties right now is one that’s currently off-market in Mill Valley. He attributes its popularity to the property's flat, usable yard, incredible garden space, pool, and walkability to both downtown and nearby trail heads.
Grant Beggs, also a real estate agent with Sotheby’s San Francisco Brokerage, agrees with Racich, saying families with children are looking for safe places where kids can get outside and enjoy the fresh air in a controlled environment. He says potential homebuyers are willing to give up beautifully appointed common areas, like patios and gyms, for fully private spaces.
“Buyers are making geographic trade-offs in order to secure a home with this private space,” Beggs says. “In San Francisco, we are seeing buyers refocus their searches to neighborhoods farther away from downtown, where they can get a single-family home. Their budget hasn't changed, but they are willing to be more flexible on the neighborhood if it means getting a single-family home versus a condo or a co-op.”
He says his team expects to see this trend continue as the way we work is evolving and parents get used to homeschooling their children. These trends aren’t just occurring in bustling cities like San Francisco, however, as Amanda Pendleton, Zillow Lifestyle Expert, explains.
“A new poll commissioned by Zillow and conducted by the Harris Poll identified the top reasons why Americans say they are considering moving as a result of spending more time at home due to social distancing orders, and their top three reasons are wanting a home with more outdoor space, wanting a more affordable home, and wanting a home with more rooms,” she says.
She says these findings suggest people are looking to move in order to get different home characteristics, not necessarily a change of scenery. The caveat is that affordable homes with more outdoor space and rooms are typically found outside of urban cores.
“Whether home buyers will actually leave their neighborhoods, their schools, and their friends as a result of the pandemic will not be evident for a while.”
Tucker says while his team is closely watching this possible shift of city dwellers browsing listings in suburban or rural areas, he hasn’t noticed a trend of people looking to uproot their families entirely.
“If COVID-19 really restructures people's options to work from home in the long run, we might expect to see that trend play out more in years to come. But in the meantime, there is so much uncertainty about how long this will last and what future commute patterns could look like that we haven't yet seen a clear shift in consumer preferences in response to the pandemic.”
The Bottom Line
While active listings are historically low, Tucker says if you do happen to find your dream house and you’re sure you can afford it, today’s low mortgage rates will certainly make it cheaper to buy now.
“For qualified borrowers with very secure income or assets, this could be a fine time to buy a second home,” Tucker says. “Interest rates are near record lows, and buyers who lock them in with a fixed-rate mortgage today can benefit from those low rates for decades to come.”
He advises to inquire with a local real estate office in the area you’re looking to purchase to get detailed information on how and if it’s still possible to close on a home right now. For example, while areas along Florida’s Gulf Coast may be ramping back up, Atlantic coast destinations with the same latitude are under completely different orders.
“Broadly, most states have been recognizing that real estate is an essential industry and permitting it to go forward, but don't just assume that's true where you're looking,” Tucker says. “Take advantage of new tools, like video inspection appointments and 3-D home tours to get a sense for homes' interiors without risky face to face interactions. You'll be surprised how quickly real estate agents are adapting to make the home search possible in a safe, socially distanced way.”
Ultimately, you are the only one who can decide if purchasing a home right now is the right move for you. If you have the finances, confidence in your income, and believe a new or second home would improve the quality of life for your family, now could be a great time to make such a purchase that might bring solace in the days to come.
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