In real estate, time is usually your friend. Home prices tend to appreciate (meaning increase in value) so the longer you hold on to a property, the more money it is usually worth.

Well, time may be your friend in the short term as well.

These are scary times. The stock market is extremely volatile, more than 20 million people have lost their jobs and many homeowners are now in forbearance – a program designed to basically delay mortgage payments so that many of those affected won’t end up losing their homes.

Although some people may compare this current real estate market to that of the 2008 financial crisis, it is actually quite different.

You may have heard that mortgage interest rates are at an all time low making it easier to buy a home. Well, this is true but only for people who have excellent credit and a good debt to income ratio.

It’s actually HARDER for many people to buy a home nowadays. With the economy in disarray and unemployment at an all time high, lenders are tightening their requirements.

For example, the minimum credit score to qualify for an FHA loan is 580. While the government has not officially changed this stance, lenders have overlayed their own requirements and many now require credit scores ranging from 640-670 in order to qualify for an FHA loan.

Even for conventional loans, many lenders like Chase require 700 credit scores and are only approving the top subset of the financial population. Additionally, lenders/banks are verifying stable employment for longer time periods.

There’s also the issue of housing inventory. Many home sellers have pulled their listings off the market and are waiting for things return to “normal.”

After all, there are fewer potential buyers since many states have issued stay at home orders. Moreover, many sellers don’t want a bunch of strangers coming into their homes potentially infecting their loved ones.

Real estate agents are getting creative however; many of us are doing virtual showings of properties.

That said, the thought of spending hundreds of thousands of dollars on a property without physically seeing it is too much to stomach for most buyers.

In other words, for both buyers and sellers in many parts of the country, such as New York City where we’re located, it may make sense to wait a month or two.

Once more people/buyers start to come out of their houses, there will be more demand for home sellers.

Home sellers will in turn come out in droves and list their properties, leading to more choices for home buyers. Lenders may also begin to relax their lending requirements once they see the economy recovering.

The Case for Buying or Selling a Home NOW

Once can also reasonably make the case that there has never been a better time to buy a home.

If you’re a buyer with great credit, and you live in a competitive home market, then you should absolutely take advantage of low interest rates and fewer buyers (hopefully) to compete with.

In some markets, such as Philadelphia, the Bay area and southern Florida, even now in the midst of a pandemic, there are bidding wars taking place on many properties. In some cases, buyers are paying 20-30K above asking price!

In other words, since home prices tend to appreciate, there’s a chance that the later you wait to buy a piece of property, the more expensive that property will become. Again, if you’re a property owner, time is your friend.

There may also be other personal factors to consider. Maybe you’ve just relocated due to a job offer and need to move into a new place. Perhaps you’re relocating to a better school district for the kids or received new military orders.

Again, your own personal situation may outweigh any aforementioned macroeconomic concerns.

Conclusion

In short, if you’re a well qualified buyer, you’ve worked hard to put yourself in a great position to purchase a home so don’t let anything stop you.

If you’re a buyer who may be on the fence, in terms of your financial position and credit, you should probably wait a bit. Work on improving your credit and reducing your monthly debt so that when this pandemic is over and lenders (hopefully) relax their requirements, you’ll be in a great position to buy.

If you’re a home seller in a state that has relaxed their stay at home orders and more potential buyers are now out in the market, then go ahead and list your home.

If, however, you live in a market like New York City where many people are just now beginning to trickle out of their homes, you may want to wait just a bit until potential buyers have returned in full force.

As always, in real estate, time is your friend.