Inventory is still low and anxious buyers are waiting for new listing to hit the market. According to the Multiple Listing Service, new listings were down 25%, for the first two weeks in May, in Chisago County, compared to the same time period last year, but the median days on market for the pending sales, that were listed in May, was only 8 days and the median list price was up 5% from last year, at $299,650. This market prompts many properties to sell on day one and in multiple offers.
May is typically one of the busiest months of the year as the buyers want to move over the summer, but sellers are not listing their homes because of COVID-19 fears. New lake home listings were down by 47% for the first half of May compared to last year, but new construction listings were triple last year’s listings.
For sellers thinking about selling, now is a good time to get your home on the market. In a normal year, the market starts slowing down after school gets out, as people start vacations, weddings, graduations, etc. This year could be completely different with social distancing, and the cancellation of large gatherings.
Buyers are waiting for the right home and right price, so even though the market is moving fast, homes need to be priced right. With new construction listings up, some neighborhoods are seeing a decline in pricing as buyers prefer to purchase a new home than a pre-owned home.
We do not know for sure how COVID-19 will impact the real estate market in the coming months. But there are indicators; some homeowners and renters have taken advantage of deferred payment programs and if the homeowners or renters can’t catch up on their payments, we could see an influx of foreclosure properties. There is also high unemployment, and lenders are requiring 4-6 weeks of steady employment once they return to work, which can delay sales and closings. Some lenders are requiring higher down payments, which can eliminate some buyers from qualifying. Some Air BnB and VRBO companies are recommending that owners with mortgages, sell their vacation properties due to high cancellations and increased expenses. With more and more businesses electing to keep their workers at home they may need less office space, and some businesses are closing for good, which can increase the commercial property inventory. We are also seeing sellers trying to sell their condominiums downtown and move to the suburbs, to increase social distancing.
If you are thinking about selling your home, you should contact an experienced real estate agent for expert advice on when to sell and for how much.
Ask the Real Estate Agent is a weekly column by Cheryl Kempenich of Coldwell Banker Burnet, who lives and offices in the Chisago Lakes Area. Submit your questions to firstname.lastname@example.org. All information is deemed reliable but not guaranteed. For legal assistance consult an attorney.