The pandemic fallout has wrought havoc with the stock market, causing it to plummet at record rates and to record lows. But before that, the market was rising to giddy heights. Ultimately, we just don’t know how this will all turn out. What we do know and have had reaffirmed is that the stock market is volatile. The question for many now is how it will impact the real estate market. So let’s take a look at what this volatile stock market means for those buying or selling real estate in Coral Springs and Parkland.
What the Volatile Stock Market Means for Buying Coral Springs and Parkland Real Estate
The volatile stock market will impact those buying (or selling) real estate in Coral Springs and Parkland, but not as adversely as you may think. In fact, it probably benefits buyers quite a bit.
The first thing to consider here is the current historic low interest rates, which was the result of the Fed’s second rate cut in March of this year. Here, according to the experts, is how it shakes out: “Low interest rates mean you could buy a house and have lower mortgage payments than you otherwise would, or you could purchase a more expensive home than you would otherwise be able to afford. Sellers who are facing financial problems might be eager to sell their homes and might be willing to accept less money than they would have in a more stable time.”
Still, there’s a lot of uncertainty and fear, which makes buying a little dicey. Interest rates are indeed very low, but the economy is in turmoil. And this means that job stability is far from certain, and the stock market, while it will eventually rebound, may remain low for a long time. So buyers can’t depend on steady employment or their investments to help them make those monthly mortgage payments.
It may also be more difficult to get a mortgage because “lenders could be more cautious than usual. They might have stricter standards to make sure they don’t issue mortgages to borrowers who might not be able to repay them. That means that it could be harder to qualify for a mortgage now than it was just recently.”
BUY NOW OR WAIT?
Whether buying (or selling) real estate in Coral Springs and Parkland right now is a good idea ultimately depends on your own unique personal situation. If you have the money for a down payment and all the other costs and you are certain your job is secure, now – with interest rates so low – is a good time to buy. Otherwise, it may better in this time of uncertainty to exercise some caution and wait.
Consult your local real estate agent to find out what’s going on in the local market. This should be another important element in your decision making.(Discover more by calling +1-954-804-4248 .)
What the Volatile Stock Market Means for Selling Coral Springs and Parkland Real Estate
Things aren’t as dire for those buying or selling real estate in Coral Springs and Parkland as some would have us believe, and things are still somewhat hopeful for sellers.
With the stock market currently dipping and remaining volatile, real estate becomes an even better investment hedge, being a safer bet than other investments right now, especially stocks. Financial experts say that “an economic slowdown may be a reason to buy real estate since this investment speaks to a variety of investor needs, including diversification and income generation. So it is important to understand the value of property investments ina portfolio during a recession.” Typically, when the stock market is performing poorly, investors tend to turn to real estate as a safer investment – which is good news for sellers.
GOOD AND BAD
While this may be a great time for buyers, it’s still a pretty good time for sellers. And the reason for this, according to a recent survey, is that 70% of homebuyers have not had their ability to afford a down payment adversely impacted. Only “13% of respondents said the stock market volatility had impacted their ability to afford a down payment.”
But it’s not all rosy for sellers because buyers are walking the thin line between “stock market declines and lower mortgage rates.” Many buyers who want to take advantage of the low rates were also counting on liquidating stock investments for the down payment, which means they are now unable to buy. The prediction is that “in the coming weeks and months the positive effect from low mortgage rates will wane as the negative economic impacts rise.”
BEST MARKET FOR SELLERS
Luxury home sellers are in the worst position. According to that same survey, “[p]eople who earn over $200,000 annually were more likely to say the recent volatility has impacted their ability to afford a downpayment, at 18% of respondents. Higher earners tend to have more invested in the stock markets, and therefore, would be more impacted by volatility.”
Baby boomers, however, seem to have retained their ability and desire to buy, with only 9% reporting that their ability to make a down payment has been impacted. The reason for this is that, typically, retirees and those nearing retirement “invest less of their wealth in the stock market in favor of more stable and less risky investments. It could also indicate that boomers are able to finance home purchases with other savings and equity from a current home as opposed to pulling cash from the capital markets.”
So this demographic is where sellers should concentrate their marketing efforts. Your local agent can help you with this targeted marketing.
A Good Agent More Important than Ever
So despite the plummeting and ever-volatile stock market, the situation remains pretty good for those buying or selling real estate in Coral Springs and Parkland. It’s just that buyers and sellers may have to alter their tactics and expectations during this unprecedented time. And that means that the services of an experienced local real estate agent are more critical than ever.