If you had planned to buy a house in 2020, COVID-19 might have interrupted your plan. However, all is not lost as you can still achieve your goal during the pandemic. But first, you need to ask yourself if buying a house at this time is the right investment decision.
Thankfully, we’ll look at the benefits and disadvantages of buying a new house during COVID-19. That will help you make informed financial decisions on whether to proceed with the investment or not. Keep reading to find out what’s best for you.
Pros of Buying a New House during COVID-19
Buying a new house during the coronavirus pandemic comes with numerous benefits. If you find a home that fits your lifestyle and you have enough funds to finance it, proceed to buy it – even now. In that case, you can consider the new homes in Aurora, Ontario.
Here are some of the advantages you’ll enjoy when you buy a new house now.
1. Less Buyer Competition
Finding your dream house in your preferred location can be easy during COVID-19 since there’s less competition for homes. Although the demand for houses is usually high, some potential homebuyers have decided to stay out of the game.
As other buyers wait for the housing market to pick up, you can take advantage of it and buy a house at this time. That will give you the chance to negotiate for affordable deals. So, you won’t have to worry about competing with other home buyers’ offers.
2. Low House Prices during COVID-19
Due to the pandemic, many potential homebuyers have delayed purchasing new homes due to their financial hardships, like loss of jobs. So, home prices have dropped significantly, making it easy to find affordable deals.
Some of the possible reasons the prices might have dropped include:
- Uncertainty of making mortgage payments by the borrowers
- Fewer inspections and auctions due to social distancing
- Declined auction clearance rates, meaning many homes remain unsold
3. Possible Increase of House Prices in the Future
You should buy a house now because house prices will most likely increase in the future when things return to normal. Although the house prices are low right now, most real estate experts predict that the prices will rise in the future.
So, why would the home prices increase? When social distancing and quarantine ends, many potential homebuyers who stayed back will return to the market, and the demand will increase sharply. So, buying a house now will help you save thousands of dollars.
4. Virtual House Buying Guarantees Buyers’ Safety
Can I buy a house during the pandemic? Most potential buyers who ask this question are concerned about their safety. The good news is, there are effective measures and policies put in place to keep you safe, including virtual house touring and auctions.
With the help of virtual technology, you can meet online with real estate agents, home sellers, and mortgage company representatives. The best part is, you can take virtual tours of the home you intend to buy. Private inspection services are also available.
5. Falling Mortgage Rates
Since the coronavirus struck, many home buyers and sellers have pulled back, slowing down home resales. Consequently, the interest rates on mortgages and HELOCs have declined significantly. So, it’s generally the best time to buy a new house.
To take full advantage of the low rates, borrow a fixed-rate mortgage. By doing so, you’ll still pay the same low rates even when mortgage rates increase in the future. Get a mortgage preapproval to assure the home seller you’ll get a loan to buy the house.
Cons of Buying a New House during COVID-19
Like any other investment option, buying a new house during COVID-19 also has a few drawbacks. The good news is, the pros outweigh the cons. Here are the disadvantages of investing in property at this time.
1. Uncertainty of Employment
This year, we’ve witnessed the highest rate of employee lay-offs due to the coronavirus. Many potential homebuyers are experiencing financial hardships, deterring them from investing in property. So, most of them have decided to step back.
If your income is in doubt and you don’t know your job’s fate, it might not be the right time to buy a new house. Currently, lay-offs can occur in any employment sector, making it difficult to forecast what will happen to your job in the months or years ahead.
2. Numerous Logistical Challenges
Buying a house during COVID-19 is very complicated due to the strict guidelines and policies put in place. You might not leave your house to meet face-to-face with a home seller. But if you do, you must practice social distancing to avoid the virus’ spread.
Remember, buying a house usually involves many face-to-face interactions as many people visit the listed home. However, social distancing rules has challenged the entire process. Home sellers have cancelled walkthroughs and open houses.
The sellers who still live in their houses don’t allow visitors to see the homes in person. Unfortunately, not every potential homeowner has transitioned to virtual house buying.
Whether it’s the right time to buy a house or not during COVID-19 relies heavily on your financial situation. If you are in a better position to invest now, take advantage of the low mortgage rates and low house prices. This way, you’ll save thousands of dollars.