September’s Socioeconomic View: Buyer’s Market
Opportunity frequently lies in the wake of unsettling trends. Amidst a timely combination of top-down restrictive business & social orders, coupled with the coming presidential election, there has been no better time in recent memory for first time home buyers.
The following trends have led to a decrease in average housing price, as well as a decrease in average rates offered by institutional mortgage lenders:
-Local & Federal politician’s response to the pandemic has forced businesses to abruptly close, leading to millions of layoffs or furloughs. Both commercial & residential lenders are looking for consumers who qualify to make consistent payments on future loans; decreasing the rates.
-Borrowers are forced to consider temporarily liquidating assets to sustain while the proverbial rain passes: decreasing costs of both real estate and business related capital as supply temporarily increases.
-Decreased standards on multiple loan packages will allot new buyers with low down payment thresholds, but high marks in future earning & past payment track records the opportunity to enter a mortgage position previously unavailable.
-As both corporate & small businesses continually alert employees they will not have to re-enter central offices through 2020, realtors are working overtime to meet demand from first time home buyers. There’s an increase in demand for at home space that will last through 2021.
-Due to the pandemic, suburbs have seen an increase in demand due a fleeing of residents from cities to less densely populated regions; subsequently shoring up the temporary increase in supply from local markets.
-The stock market has maintained a bull position since the fall in March, something sure to correct as many analysts have noted. A mass liquidation of stock-related holdings would increase demand for in the suburban housing market, as this asset class is traditionally viewed as a safe hold.
-Federal & Local restrictions with regards to the pandemic have slowly been lifted in recent days as the CDC has continually reported the decreased threat to non-immunocompromised sectors of the population. Returning to work & patronizing local businesses will fuel current homeowners through their temporary financial woes.
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