2020 was a tough year like no other where coronavirus disease (COVID-19) pandemic has shut down the world. Aside from the employment, education, travel, and health sectors, this global health crisis significantly impacted the real estate market — and there will be more possible changes that we need to adopt in the next months. According to Charles S. Gascon and Jacob Haas recent study published on Federal Reserve Bank of St. Louis, as the pandemic forced everyone to stay at home, this led to fewer buyers looking for homes and fewer sellers willing to list their properties or allow strangers to enter their homes during a pandemic.
The effects of the pandemic in the local real estate scene
Since the start of the new work setup for most employees last 2020, many households are reconsidering their homes as substitutes for offices, schools, restaurants, and recreation facilities. One of the big changes in the employment industry is the work-from-home policy. Initially, this is a way to keep employees safe at home, however, some of the big companies opt to maintain this setup for a longer time, inspiring companies everywhere to step away from very large real estate construction projects and lease deals.
Historically, most of the homeowners have still struggled in fears due to the 2007 financial crisis where mortgage payment and the unemployment rate reached historic highs. Asia Property HQ affirms that the Philippines’ real estate market took a big hit from the pandemic. However, the Philippines Central Bank expects a strong recovery in 2021 with a 7.8 percent growth. While this may be true, hopefully, the industry will be highly influenced by border restrictions and the distribution of COVID-19 vaccines. In fact, vacancy rates are projected to increase from around 5.5 to seven percent, while lease rates might decrease up to 17 percent in Metro Manila.
Meanwhile, in the US real state market scene, there is a significant similarity — the number of delisted homes increased over 25% from one year ago during early March to early April, according to the national real estate brokerage Redfin. The nationwide home sales dropped to their lowest levels since the housing and financial crisis that began in 2007.
Getting ready for the perfect purchase opportunity
While we see the effect of the COVID-19 pandemic on real estate — which may affect the purchase behavior and opportunities — it is still essential to make ourselves aware and knowledgeable on the current state of the market, its processes, and management. Especially for the millennials who are starting to build their own families, they should come up with smart decisions in buying a house or before renting a property.
It is a fact that existing homebuyers face risks of delay and default as the pandemic hits the real estate sector and construction activity coming to a grinding halt. Most of the buyers are expected to default due to pay cuts, job losses, and ever-changing interruptions to daily living, forcing them to move housing decisions further down the priority list. While most of them are waiting for the perfect opportunity to purchase their own property, might as well use their time in learning more about homeownership, as it requires a significant financial commitment, a complicated process, and a good amount of research. After all, having a basic knowledge of how things work, especially about “adulting” stuff, is a must-have.
Helping you understand the prerequisites
There is a long list of priorities before buying a house, and these might be mind-boggling if you don’t have any idea — or basic knowledge, at least — of how it works. First, you want to understand why you want to buy a house, especially in this of a pandemic. Checking your credit score, creating a housing budget, and shopping for a mortgage should be on your top list. Luckily, there are a lot of useful website choices that will help you understand and organize these prerequisites.
Mortgage Calculator UK, offers a wide range of tools from mortgages, money-saving calculators, home loan options, and real estate investors and property sellers. As a young adult, who has been working for almost 4 years and now considering buying their own place, this website is beyond useful. Its tools help me estimate my monthly mortgage payments based on the purchase price, down payment, interest rate, and other monthly homeowner expenses — basically a one-stop online mortgage calculator for a newbie like me.