During this time of uncertainty, it’s reassuring to be able to ask a question + get an answer from a trusted pro.
We recently asked you to send us your questions about the real estate market – and now we have answers, thanks to Ruthie Ravenel of Daniel Ravenel Sotheby’s International Realty.
Q+A:
Q: Can we expect rates to get below 3% within the next year?
A: This is uncharted territory and it’s really impossible to tell how the virus and resulting slow-down (or recession) may affect rates long term. Keep an eye on the news and markets in the coming weeks and talk with your trusted mortgage advisor.
Q: Should I wait to buy a house if housing costs will go down in the next few months?
A: It makes sense to press ‘pause’ for the next few weeks as we get through the worst of the Coronavirus spreading in our area. For those locked in their home, there is no doubt they are looking at real estate, but if we are not able to show houses it will be difficult to sell anything.
Agents are using virtual tours and technology effectively to communicate with clients, but I believe we will see a slow down of properties going under contract until the public is able to move about more freely.
I believe there will be pent up demand for housing and a huge burst of new listings once we are through this “quarantine” period.
Q: Will the possibility of a recession bring housing costs down? Will interest rates stay low, or go lower?
A: Recession may very well reach into the real estate markets in the coming months. We feel that prices may flatten out but likely will not go down as they did in 2008.
The market up to this point has maintained a steady rate of appreciation which is consistent with stable price growth. Before the major price drops in 2008, prices had been rising much faster than they have been in these past few years, so the chances of a major bubble bursting are low. Also, keep in mind the 2008 crisis was much more linked to housing than this current Coronavirus cause.
Q: When do you think housing prices will be at their lowest?
A: It’s impossible to tell at this point (until we see when society is back up and running) whether this will have a major effect on long term housing.
Q: I just bought my first home last July. Should I refinance now that interest rates are so low? Is there a specific amount of time you have to own before you can do this? How much does it cost?
A: Refer to a trusted mortgage advisor on this point. Closing costs can vary depending on the program you have and incentives you may get from the lender. You should be able to refinance very quickly after buying a home (if you purchased in July, you should be able to re-fi now).
Q: When is a good time to list my home in light of coronavirus? Is anyone looking to buy right now? What is the interest rate on a 15-year mortgage?
A: This is a difficult question to answer and would depend on the situation of the seller. Some people may want to be on market now since there is increased online traffic to homes with the majority of the population “hunkered down.” More eyes on your home online is always a good thing!
However, it can be difficult to sell a property if you cannot show it – so I see the inability to get into properties in person as a hindrance to going under contract during the next few weeks. If a seller is interested in a very quick sale, it may be best to wait until we have more clarity in a few weeks and people are able to move about more freely.
Q: As a homeowner in PMI, do I still have time to get my house appraised to remove PMI?
A: I would talk with a mortgage banker about this. Different areas have different rules on what is deemed an essential business and it may be that appraisals related to a refinance may not apply.
Q: I have a lovely townhome on Johns Island I have been wanting to sell when my renter’s lease is up at the end of May. With all of the uncertainty, I’m wondering if I should keep the renters (I pretty much break even) or try to sell it and make a small profit?
A: We are unsure where markets are headed both for the rental market and for potential listing sales. It would depend on your personal circumstances and needs to be discussed in more detail with your real estate advisor.
Question:
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If you’re looking to buy or sell in the coming months, learn more about Daniel Ravenel Sotheby’s International Realty + meet their agents here. Ⓟ