BOSTON — An historic pandemic and record setting unemployment doesn’t sound like the right backdrop for a hot real estate market, but many homes are getting sold in days and going above asking price.
“Always looking, always looking. I had the leads on email, alerts in the area,” said Mara Rodriguez. The education technology executive spent about a year before she finally found the right house for her and her family.
“I had to move very quickly, like it was a very hyper competitive market,” said Rodriguez. “I could see that there was a lot of movement despite it being a unique situation.”
By unique she means a global pandemic that brought the economy to a grinding halt.
“I remember in mid-March, everything stopped for a good three to four weeks and I was a little nervous,” said Marie Presti, owner and broker at The Presti Group, based in Newton and Stoneham. “I actually had a lot of calls from prospects and past clients thinking that maybe the market was going to decrease by five, 10, 20 percent.”
Presti’s worst fears never came true. In fact, it’s pretty much been the opposite. “Home prices have actually gone up.”
A big driving force has been unprecedented interest rates.
“We’ve never seen rates, sub-3 percent, on a 30-year fixed, closer to low twos on the 15-year fixed,” said Bob Driscoll, a Senior Vice President at the Rockland Trust and their Director of Residential Lending.
Driscoll says low rates prompted more people to start looking to buy. “I think there’s an awakening. I think the rate environment being so low, it has perked up interest, even in terms of first-time homebuyers.”
But these new buyers jumped into the market when supply was low.
Presti estimates that about 30 percent fewer homes are for sale compared to last year at this come.
COVID-19 is making some sellers nervous, according to Presti.
“Although here in Massachusetts our numbers have gone down substantially, we’re seeing across the country a lot of other surges and it’s still scaring a lot of sellers,” she said.
Driscoll added, “It creates a double-edged sword. You’ve got the low rate which is going to increase your purchase power, but when you’re in a seller’s market, as we are right now, the home cost goes up.”
So, what should a buyer do at a time likes this? The first step is to get pre-approved for a mortgage, so the seller knows an offer is solid.
Buyers should narrow their search to just a few towns, so they get familiar with those communities. That will allow the buyer to act fast when a property does become available.
It’s a strategy that worked for Rodriguez. “You kind of have to be OK with not sleeping on it for a few days. Because if you sleep on it, get comfortable enough, then when you wake up and say I want it, it’s gone.”
Of course, no one knows for sure how long these low rates will last, but Bob Driscoll is hopeful they should be available well into next year.
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