The pros and cons of selling your home during the COVID-19 pandemic

ATLANTA - "It was the best of times, it was the worst of times” was the immortal opening to Charles Dickens’ "Tale of Two Cities," but it might as well be a description of what you’ll find when you try to sell your home during this coronavirus epidemic.

If you are trying to sell your home in the metro Atlanta market during what FOX 5 real estate expert John Adams calls the “recent unpleasantness,” then you are looking at a mixed bag.

Several things are keeping the sales market afloat right now:

1. The cost of fixed-rate loans is at a remarkably low level, and that is likely the primary force driving buyers to get off the fence. The rate for 30-year loans is right around 3.25%, and that is a give-away rate to try to hold the market together in this time of crisis. If a vaccine is approved tomorrow, rates will very likely jump, so now is the time to lock in if you possibly can.

2. There is an inventory shortage in the residential market right now, and that spells a sellers market. Many owners who might otherwise be thinking of selling have simply decided to wait out the pandemic. They don’t want a lot of strangers wandering through their house touching things and coughing all over the place. These are mostly owners who simply do not have to sell now, so they won’t. This inventory shortage drives up prices and causes bidding wars, all good news for sellers.

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3. Finally, some people are moving to the Atlanta area and are under pressure to buy whatever they can find. Yes, the non-farm unemployment rate is higher than before the virus, but Atlanta’s 5.5 percent rate of job loss has proven less than the national decline of 8.7 percent, according to the Bureau of Labor Statistics.

A "For Sale by Owner" sign is posted in front of property in Monterey Park, California. (FREDERIC J. BROWN/AFP via Getty Images)

Many of these newcomers are being transferred into our area from higher-priced parts of the country, and find our prices low in comparison, so why not buy right now? The demand is there!

However, don't just jump into selling your home without thinking about the consequences. Before you think about dropping that "for sale" sign, remember these facts:

1. People are spooked right now. They can’t make sense of anything that’s going on right now and everything seems so uncertain. Wall Street hates uncertainty and consumers hate uncertainty.

People buy real estate when they have a high level of confidence, and a LOT of people simply have little or no confidence in things ever getting back to normal. So they decide to do nothing.

2. A lot of buyers are simply hurting financially right now. Perhaps they have had to dip into savings, so they don’t have as much for a down payment, or maybe they have been laid off from work and can’t qualify for a loan now.  Many have seen their credit scores go down over the past few months.

A major financial crisis can easily lead to the decline of credit scores when consumers miss payments on their monthly bills (like a car loan or credit card). Repairing the damage is possible, but consumers need to be patient.  Credit scoring agencies look for improvements over a period of several months and are notoriously slow to update their scoring models.

3.  Prospective buyers are put off by the traditional process of in-person viewing of homes for sale. They may be distrusting of virtual tours (in some cases for very good reason), they may be worried about contracting a deadly virus from touching a doorknob or a countertop, or they may not want to spend time in the backseat of a car with a potentially infected realty agent or in the office of a loan officer.  In reality, the real estate industry has adapted fairly well to these challenges, but most buyers are simply unaware of current practices.

So whether you think of it as the best or worst of times depends on your point of view. But the bottom line is clear.

If you need or even want to buy a home, you need to understand that the cost of borrowing is, for most folks, the largest part of their housing expenditure.  If you can lock in today at these super-low fixed rates, you will be rewarded not only today but every day for the next 30 years.

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