Local experts weigh in on COVID housing market
One industry that has seen the positive effects of COVID-19 is our local real estate industry.
How the real estate market responded to the pandemic varies on location, but ours in Beauregard and Vernon Parish has been thriving.
What makes us unique?
Local real estate agent Katlyn Morrow of Latter and Blum explains that it is our proximity to Fort Polk that makes us unique.
In Beauregard and Vernon Parish, people are always coming and going and those people drive the housing market.
Morrow pointed out that even though things are moving slower because of COVID, the proximity to Fort Polk has kept the market alive, just different.
“Typically we see a boom in movement during certain time frames, depending on when the military hands out orders to relocate. In past years, the norm is for the military to start moving in the middle of spring,” Morrow said. “Because of COVID, and the hold militaries put on moving, families won’t be able to leave until mid-summer. Those with children are moved in enough time to find a place, report for duty and give time to be here before school starts in the fall. They also move families in phases so not everyone is moving all at once. With that being said, now that people with orders to or from Fort Polk have been pushed, everyone who was supposed to have already moved will now be moving later and with more families, but they will still be moving.”
This delay in military moving has resulted in COVID trends. With so many people moving at one time, Morrow is starting to see a lot of families looking for the same kind of house. What this means is “the number of homes to choose from start to dwindle down. I am seeing multiple offers being put in on homes, offers being submitted for over asking price. If a client’s offer is not accepted due to multiple offers being submitted, we are having to find another home for them. Keep in mind that anyone else who submitted an offer on the home that wasn’t accepted is also looking for another home similar. So the potential of running into that multiple offer situation again is still there,” said Morrow.
We asked Morrow for her advice for people thinking about buying right now. “Bring your best and highest offer. With multiple offer situations, sellers are going to compare offers to see which one can get them the most. From higher price to quick closings, and paying for buyers closing costs, all things that make the process quicker and better for a seller will go a long way as a buyer,” Morrow said.
Morrow went on to touch on the subject that has been at the forefront of many minds in that how will this situation not turn into one similar to the 2007-2008 housing market crash?
“One thing that has changed in this pandemic that is going to help the economy to not turn into another 2007-2008 epidemic is the change for loan requirements, Morrow explained. “The credit score qualifications have been raised from their typical requirements. On the downside of this is that where this was done to help the economy, those buyers who qualified before the pandemic may not now due to the rise in credit score requirements.”
“Interest rates are at low right now. It’s a great time to buy!” she said.
To learn more about current interest and mortgage rates, we turned to local AFI Mortgage Company Branch Manager Artem Shakriov.
“Surprisingly the pandemic has had a very positive effect on our business because March up until now is the busiest I’ve ever been. I guess people want a new house after being stuck inside their own home for 2 months. However, if interest rates weren’t at nearly all-time lows, I’m sure that the pandemic would have more of a negative impact,” Shakirov said.
Shakirov went on to do us all a favor and cleared up a common misconception. “When you see articles saying ‘record low-interest rates’, they are only talking about your top tier conventional loan. 250k loan amount, 20% down, 760+ credit score. Other loan programs like FHA and VA have low-interest rates, but they are not at all-time lows,” Shakirov explained. “With that said, right now is the cheapest borrowing money has been in probably the last 40 years. One negative people can expect is loans may take slightly longer because everyone in America is trying to take advantage of the low rates currently. So some lenders are backed up as much as 3 weeks in underwriting due to the large volume of loans.”
Morrow said now was the time to buy, and Shakirov agrees. “Now is absolutely the time to buy,” Shakiorv said. “For a $200,000 house, people’s mortgage payments are $100 lower right now than they have been at almost any point within the last 40 years. Now is also the time to refinance. 99% of borrowers can lower their interest rate dramatically, save possibly hundreds each month on their mortgage payment, which turns into huge savings over the life of a 15, 20, or 30-year mortgage.”
We asked Shakirov if he was surprised by any of the local trends to come out of the pandemic. “Surprisingly, one local trend I’ve seen since COVID19 is people are purchasing larger homes, not smaller. The average loan size in Beauregard and Vernon parish is about $150,000, but since March my average loan size has been about $206,000.”
When asked what advice he would give someone who was thinking of buying for the first time Shakirov said “I would advise them to speak to a mortgage broker. A mortgage broker works with multiple lenders, for example, I work with 10. What that allows brokers to do is to shop the loan for the buyer to ensure they are getting a great deal. Even if they have less than perfect credit, they should still reach out and see where they stand.”
Now that America is rebuilding, what can you expect from your local housing market?
Morrow says: “Homes selling faster, competing with other buyers more frequently, interest rates lower than we are used to seeing, and potentially longer loan closings.”
Tips for Potential Buyers
- Get prequalified
- Find a realtor that best works for you and your family
- Have a professional home inspection
- Shop your rates with lenders, shop insurance quotes
- Just because you’re pre-approved for an amount doesn’t mean that’s how much you actually want to spend. Stay in a price range that keeps you comfortable financially each month
Tips provided by Katlyn Morrow, Agent of Latter and Blum