New Tools for Home Buyers as the Pandemic Upends Real Estate


Dan Feder, a graphic designer, and his husband, Don Bacigalupi, a museum director, have lived in the Hancock Park neighborhood of Los Angeles for two years. But they started looking to move closer to their teenage son’s school when pandemic lockdowns showed they could avoid a commute across town by working from home.

Yet having moved from Chicago two years ago, they still felt that they had an outsider’s view of Southern California real estate. They worried, too, about making a mistake in an uncertain economy.

“With so many unknown variables in the world, we wanted as much information as we could get before moving forward with such a large financial decision,” Mr. Feder said. “As an outsider, it’s difficult to gauge that.”

Buying a home under any circumstances can be stressful. But with some buyers looking to improve their lives during the pandemic and others trying to flee congested cities for greater space in the suburbs, the rush to move could cause unexpected problems. Companies are coming up with creative ways to help ease the process.

The financial aspect alone is daunting in this economy. Down payments on a home can be 25 percent to 30 percent of the purchase price, money that becomes largely untouchable once it’s handed over. But there are other factors to consider. Carrying costs are one, but so is the nature of a home as an asset: It may be worth millions of dollars on Zillow, but selling it for that price can be difficult.

The pandemic has created interrelated dynamics that make the process more complex. Some buyers want out of their city apartments, having already been cooped up in them for months this winter. If they have children, they may be acting quickly to get settled before the school year starts.

Existing-home sales in the United States fell 26.6 percent in May from a year earlier, to 3.9 million, according to the National Association of Realtors, but the pandemic has been a catalyst for many to move, with suburban areas drawing more interest, according to a separate report from the Realtor group. For example, the median sale price of a home in New Canaan, Conn., which is within commuting distance of Manhattan, rose 29 percent in May from the year before.

The national average interest rate on 30-year fixed mortgages fell below 3 percent for the first time on record this week, which could spur more people to buy a home.

There are deals in cities for those with cash and a strong stomach. Some of those purchases, costing millions of dollars, have been made through online scrolling and Zoom walk-throughs. But when purchases are driven by video, what catches the eye sells, and flaws can be missed.

“While various video technologies are changing how we travel and what we need to see live, I would not advise nor endorse buying any real estate sight unseen,” said Bill Nimmo, who heads the real estate asset management group…



Read MoreNew Tools for Home Buyers as the Pandemic Upends Real Estate

0 0 vote
Article Rating
Subscribe
Notify of
guest
0 Comments
Inline Feedbacks
View all comments
0
Would love your thoughts, please comment.x
()
x