Real estate investors in Houston should expect uncertainty during the coronavirus pandemic. There hasn’t been a widespread pandemic of this scale in recent years that has affected the global economy this drastically.
How will the market react? truth be told no one really knows the long term affects the pandemic will have on real estate investments in Houston.
Here at Sell Your Homes Houston we are watching the real estate market and seeing how it has been affected by the pandemic.
Here are a few changes we have seen:
Shift in Demand
In Houston, we have seen a decrease in the number of buyers looking for a home. While there has been an increase in the number of homes on the market.
This means that buyers will have the upper hand during real estate negotiations. There will be less demand for homes, so the sellers will have to be willing to sell at what the buyers are willing to pay.
If you are having trouble selling your home, you can contact us here at Sell Your Homes Houston.
Increase in Foreclosure and Evictions.
Unfortunately, many homeowners in Houston are losing income and might not be able to afford their mortgage payments.
There may be a surge in distressed properties, which means real estate investors can pick up properties for less than market value.
As an investor, you aren’t taking advantage of homeowners but helping them through a difficult time. If you are having issues paying your mortgage or rent you can search the Harris County website here for information on pandemic government assistance programs.
Housing prices, in general, will not be increasing, and there will be a lack of demand for new construction homes since pre-existing homes will be readily available.
Distressed Properties For Sale
This is expected to be a great opportunity for real estate investors because of the increase in distressed home sales. Unfortunately, the coronavirus pandemic has put a lot of people out of work creating a dire financial situation for many Houstonians.
Selling their house might be the only way out. This means they probably won’t haggle much on the price if they aren’t getting many offers.
These sellers, however, maybe a little more emotional than usual, so do take that into consideration while in negotiations.
Low Occupancy Rate
Real estate investors that own short term rentals or vacation property rentals should expect to have extremely low occupancy rates while the coronavirus pandemic is going on.
Most people will not be vacationing or visiting relatives while stay at home orders are in effect across the nation. In addition to the homeowners, vacationers may have lost the income needed to go on these trips.
You may need to lower your rates temporarily to attract short term renters. Even if you don’t charge full rent, you will be able to cover at least some of your expenses.
Eviction and Foreclosure Suspensions
Real estate investors in Houston should expect to suspend any pending evictions and foreclosure measures on any tenants during the coronavirus pandemic.
Essential-only work orders and stay at home orders have caused an unprecedented amount of unemployed workers, which means they may barely be able to afford food and may not be able to afford the roof over their heads.
Under normal circumstances, these people would most likely be evicted, but during the coronavirus pandemic, the eviction must be suspended to give them time to come up with the unpaid rent or mortgage payment.
Any property owners with mortgages that have also experienced unemployment may also not be able to pay rent on time and under normal circumstances would have foreclosure proceedings drawn against them, but during the coronavirus pandemic, these proceedings must be postponed.
If you want to know more about how you can stop the foreclosure process in Houston read this article.
Stricter Mortgage Lending
Many mortgage lenders such as Chase, Wells Fargo, and Bank of America to name a few have changed their lending guidelines. They have opted for tighter lending control by requiring larger down payments and higher credit scores.
With the drop in the mortgage rate on loans, there is a gigantic surge in applications for mortgages on real estate.
With this large influx, the mortgage originators must start to have tighter restrictions in order to refrain from over-lending.
Conclusion
Real estate investors in Houston should expect uncertainty during the coronavirus pandemic. This article covers some of the effects we are seeing here at Sell Your Homes Houston.
Currently, there is a shift moving towards a buyers market, stricter mortgage lending, lower occupancy rates, and increased distressed properties for sale.