The US housing market has gone through many changes during this COVID-19 pandemic. Homebuyers all over the country are wondering how Coronavirus may impact the home buying process in their local market. As we enter the homebuying and selling season we found that Cleveland’s housing market is still very competitive and many homes are facing multiple offers.
Additionally, many people are still buying homes but less are choosing to sell, creating an inventory shortage. We turned to one of our Cleveland Redfin agents Joe Goldian to help us answer some of the most common questions homebuyers have about the Cleveland Real Estate market during this unprecedented time of COVID-19.
How are people touring homes right now?
“The majority of local buyers are still touring in person while following the responsible social distancing practices. I am seeing a small percentage of local buyers who prefer live video chat tours but a higher percentage of remote buyers coming to the Cleveland real estate market, who are taking advantage of the live video chat tours.”
Has competition declined?
“Not at all. Like many markets when COVD-19 hit, particularly when our stay at home order was put into place, we saw a big drop off in both supply and demand. From my perspective, that equilibrium has shifted. Buyer demand has been increasing, but new seller supply has remained weak.”
How competitive are the offers on current homes listed for sale?
“Offers on current homes listed for sale are very competitive. It doesn’t feel much different than last fall before the pandemic hit. Homes that are properly priced and in desirable neighborhoods are still selling quickly, often with multiple offers. It is common in Cleveland real estate that a customer will schedule a tour 2-3 days out on a new listing, but now it’s already under contract before we have a chance to tour. Due to the competitive nature of the market, buyers that are ready to buy would be best served touring homes within the first 48 hours of the home being listed on the market.”
What protections should homebuyers put in their contract?
“Outside of the standard financing and home inspection contingencies, a disruption of services addendum is essential in this environment. It protects both the buyer and seller in these uncertain times. For sellers looking to upgrade from their current home, I would suggest having plans A, B, and C in place. Inventory is low and competition is high. So if you’re selling, customers need to know they have a new home to live in. If their current home sells quickly, and they don’t have a plan in place, they may be put in a difficult situation.
Many sellers need to sell their home before they buy so that they can use the equity from their current home for the downpayment on the next. There are some financing options that could be put into place to work around this. Some home sellers have no interest in the uncertainty of selling their home before having a home to move into, so they choose to buy first. In this situation, you need to make sure you have your financial affairs in order and prepare for a worst-case scenario should their current property not sell in a timely manner, or for the price they anticipate.”
Are there a larger number of offers falling through?
“More offers are falling through, mainly based on the level of competition and homes receiving multiple offers. Homebuyers who put an offer on the home may not get it, causing their offer to fall through because the seller chose to go with a different offer. I have not yet seen any offers fall through due directly to COVID-19.”
Are closings being postponed due to stay-at-home orders?
“Closings are not being postponed due to stay at home orders. Title companies have put social distancing practices and precautions into place in order to protect consumers. They are getting creative in the ways they do their closings and doing things like curbside closings, allowing the deal to go through on time.”
Are homes receiving fewer offers?
“Homes in Cleveland are not receiving fewer offers. I still see multiple offers on homes for sale quite frequently. The buyers that are currently looking to buy Cleveland real estate are aggressive and motivated. They are ready to buy and put an offer on a home as soon as they tour and decide they want to move forward with an offer.”
In your opinion, is the current market in favor of buyers or sellers?
“It is clearly a seller’s market. Based on favorable interest rates and lack of inventory, homes that are listed for sale at the right price and in a favorable neighborhood are very competitive and going under contract very quickly.”