On the mind of many Mercer Island residents is the novel coronavirus, the virus that causes the COVID-19 disease. As the virus has spread across the world, markets took a hit, prompting the Federal Reserve to issue a surprise interest rate cut. Now, mortgage rates have reached three-year lows, which John L. Scott chairman and CEO J. Lennox Scott said should help the housing market sustain strong momentum.
It’s a bit too early for us to see the potential impact of coronavirus to our local Mercer Island real estate market, but so far, the scare of the virus has impacted clients wanting to hold open houses or permit people through their home that are not serious buyers.
The fear can limit the number of people through a home, but home sellers only need to find the one right buyer to move forward with a sale. Now more than ever, working with an agent to see a home you are interested in is very important.
When zooming out on the industry, housing analysts say the luxury housing market could be the most vulnerable to freefalls in the stock market. That is because wealthy buyers tend to have more money tied up in the stock market. However, historically low interest rates for home mortgages may entice buyers to enter the market.
Additionally, current homeowners who are not selling could consider refinancing if a few factors pencil out favorably – including the interest rate differential, how long you plan to live in your home and the cost to refinance.
These low interest rates can make refinancing appealing to some current homeowners who aren’t planning a move. Like many situations in real estate, what’s best in one situation may not make sense in another. Therefore, chatting with a trusted broker is my first recommendation to determine if refinancing may be the right move.
Though time will tell the impact of coronavirus to the local real estate market, one thing is for sure: Inventory on Mercer Island remains constrained.
It is a difficult market currently due to the low inventory levels in many areas and price ranges. If you’re ready to sell your home, the competition locally means you’ll likely see favorable price appreciation at closing. Buyers today need to be ready to make a decision and have all their financing settled in order to stay competitive.
Local sellers need to make sure they are working with local experts, as each local market is unique in many small ways. The right agent can make the difference of thousands of dollars by knowing timing, the comparable properties, the other agents that work regularly in the area and what buyers in those markets are looking for. Although low inventory is in the seller’s favor, their homes still need to be market ready, priced well and represented by knowledgeable agents to maximize the value.
At John L. Scott Mercer Island, we already have seen an early spring selling season, with more houses slowly coming on the market and going just as quickly. Looking forward, I expect to see a continuation of that. Interest rates continue to drop making buyers more eager to make the jump and buy, and low inventory is continuing to make the market competitive.
Sandra Levin is an office leader and business coach at John L. Scott Mercer Island.