There’s a global pandemic—Is it time to buy?
Even in the best of times, buying a house is a big decision and a big investment. Now with Covid-19 disrupting plans and changing the very way we live our lives, it’s an even tougher decision to make – “Should I buy a home during a pandemic?”
As a real estate agent in the Charleston, SC area, here’s my take on the market now and in the near future, what it means for buyers, and what steps buyers can take right now.
Long-Term Prospects and a Short-Term Situation
This pandemic has caused serious upheaval to many individuals, families, and businesses. However, we know this state of affairs isn’t permanent; what we have right now is a short-term situation. Regardless of the turnaround time for Charleston’s real estate market in particular and the economy in general, the long-term prospects are strong.
In December 2019, the National Association of Realtors ranked the Charleston market as one of the top 10 growth markets in the US. SmartAsset listed Charleston on their “Top Boomtowns in America, 2019 Edition,” at #8, with Mount Pleasant at #3 on the same list and North Charleston coming in at #9. Over the next 3-5 years, it’s predicted to outperform the rest of the country, based on factors including job growth, housing affordability, and domestic migration.
From my own research, I see that last factor having a big impact on the area. We are likely to see continued influx of families coming from cities in the Northeast down here to smaller towns and cities in the Southeast. The current move-in to move-out rate in New York and New Jersey – two states from which many newcomers to the Lowcountry come – is -5%, and I expect this to increase by 50%.
In short, we have every reason to be confident about the Charleston area market in the long term. If you’ve been considering buying in the Charleston area, you should still move ahead with that plan, as the outlook is positive.
The Impact of Covid-10 on the Charleston Real Estate Market
It’s too soon to determine the full impact Covid-19 is having on the market here. Understandably, with social distancing in effect, people are reluctant to list their houses for show, and are equally reluctant to view other houses in person. So it’s no surprise that listings and sales are down from a year ago. Closings in March didn’t show much change from the previous year, but that doesn’t tell us much because those closings were long in the making. We will have to wait for April and May data to get a clearer picture of how the real estate market has been affected.
However, we can make some assumptions about how the market will behave in the short term. We can assume there will be a continued slowdown in activity. We can also assume that some people will still need to move and list their homes, and they will need to buy somewhere else. That means that if you are in the market to buy in the Charleston area, you will find homes on the market.
Will the Pandemic Lead to Bargains in the Charleston Market?
I believe there are two main factors affecting whether you will find a good deal in Charleston: the neighborhood in which you’re looking and when you are ready to buy.
As for neighborhoods, it’s unlikely that we’ll see dramatic bargains in Daniel Island and Mount Pleasant. During the 2008 housing crisis and recession, the prices of homes in Daniel Island and in I’On, in particular, didn’t drop much. When the economy improved, those two areas were the first to come back strong. I believe we will see the same situation here with higher-priced listings in the area: they may show a little dip, but they won’t drop tremendously.
The other factor is timing. In a typical year, 55% of the market’s activity happens in the first quarter, January-March. My prediction is that the pandemic will push back this activity to later in the year, and we’ll see a stronger market in the summer going into the third quarter of the year, for an active period between July and September. A delay in activity will mean pent-up demand, pushed in strong measure by buyers coming in from out of state. This surge of buyers would lead to a seller’s market, as a multitude of buyers would be competing with each other for the same listings.
However, if my predictions are right, then this does leave a window of opportunity between when lockdown orders are lifted and when the market’s activity picks up in the summer. People who need to sell quickly – who can’t hold out for a surge of buyers in late summer, early fall – may be willing to cut a deal. It’s possible the best deals to be had will be during this short-lived buyer’s market, right when we come out of quarantine. That’s why prospective buyers should be preparing now.
How You Can Prepare for this Window of Opportunity
If you are looking to buy in the Charleston area soon, there are things you can do now, during the lockdown, to prepare yourself so you’re poised to make an offer when the time is right.
First, get finances in order if possible. This is a difficult time financially for many families, but if you’re able to obtain a pre-approval from your lender now, do so. This will put you ahead when it comes time to view houses in person.
The next thing you can do is keep looking at listings. While in-person viewings are discouraged now, you can learn a lot from photos and videos. At William Means, we are doing more “virtual walk-throughs” than ever before. This is a great way to rule out homes that are not a good fit for you and to get excited about seeing homes that meet your criteria, when you are able.
Finally, you can stay in touch with your agent. Many real estate agents are still working through the pandemic – many from home, like I am. We are here to help you and guide you through the process, even during this unprecedented time. If you’re looking for advice or help buying or selling in Mount Pleasant, Daniel Island, or the wider Charleston, SC market, give me a call at 843-806-7222 or mail me here. I look forward to hearing from you.