The COVID-19 pandemic has impacted the finances of families everywhere, causing record-setting unemployment rates and the shuttering of many local businesses. Strangely enough, the real estate market in Rochester hasn’t been taking hits like many of the other sectors of the economy. In fact, Rochester real estate is downright hot right now.
Not only did realtor.com rank the Rochester area zip code 14617, which includes West Irondequoit, number three on their list of the 10 hottest zip codes in the United States, but houses across the area are flying off the market almost as soon as they hit it. Buyers have been in a frenzy to snatch up a home in Rochester, with houses getting multiple offers within hours of going on the market. According to Tysharda Thomas, Realtor at New 2 U Homes, homes have been selling for $10,000 to $50,000 above list price.
Thomas says that the Rochester region has been a seller’s market for the past five years. There is a large pool of buyers, but fewer homes are being listed. In an economy that is trying to recover from the months-long COVID-19 shutdown, homes are in even higher demand because of low interest rates. According to Andrew Kachaylo, the President of the Greater Rochester Association of Realtors, interest rates on 30-year loans are less than 3%, making loans much more affordable for the average family.
However, the housing prices have gone up because of the limited inventory of homes for sale. While homeowners can potentially get tens of thousands more than what they bought their home for if they sold right now, they risk the possibility of not being able to find another home to buy in this market.
The deficit of available homes has caused a few new trends for buyers who want to come out on top in the bidding frenzy. The first is that many people are waiving their right to inspections. They are doing this so that they don’t get beat out on offers, but neither Kachaylo nor Thomas advise skipping the inspection. Getting an inspection done before you buy a home is very important, as it will alert you to potential issues like water intrusion and damage, which directly connect to 40% of building-related problems. By opting out of their right to inspection, today’s buyers are showing that they are more concerned about buying a home at all than they are about buying a home with issues that will affect their finances or safety in the long-term.
According to Kachaylo, buyers are offering higher down payments as well in order to close the deal. Hopeful buyers with down payments in the 5% range frequently find themselves losing out in bidding wars, so they’re starting to cough up more for these initial payments. Many people are also buying homes with cash. This allows them to speed up the closing process significantly.
All of these new trends combine to make it difficult for the average buyer to snag the home of their dreams. First-time homebuyers, who made up 42% of shoppers in 2019, are finding it particularly difficult to get their foot in the door of the current housing market. Thomas recommends that first-time home buyers work with a knowledgable buyer’s agent who can work exclusively for them. This can help them stand out to sellers and keep them from making common first-time buyer mistakes. Thomas also advises buyers to offer larger deposits, use escalation clauses that give buyers the option to match higher offers, and get into see homes before beginning negotiations.
First-time home buyers will also need to mentally prepare to transition from renting a home to owning a home. Whether you’re among the 79% of millennials who are drawn to personal real estate investments or you’re in an older generation and feel ready to jump into homeownership, you need to make sure that you’re in the right mindset to buy a home. There is no rulebook for when you need to buy a home and not everyone is ready to start this journey in a competitive market.
If you do think you’re ready to become a homeowner, be sure to get pre-approval for a loan. This will show sellers that you have the financial means to purchase the property and it will prevent you from falling in love with a home only to find out you can’t afford it. Once you know what you can afford, get your boxing gloves on and get ready to battle it out for the Rochester home of your dreams.
This entry was posted on Tuesday, September 1st, 2020 at 3:44 pm and is filed under Uncategorized. You can follow any responses to this entry through the RSS 2.0 feed. You can skip to the end and leave a response. Pinging is currently not allowed.