The question for many Roseburg OR homeowners right now is how will the crazy stock market yo-yo impact the real estate market. You’ve probably heard how the pandemic fallout has wrought havoc with the stock market, causing it to plummet at record rates and to record lows. But remember… not too long ago, the market was rising to crazy new heights? Noone can really say for certain just how this will all turn out. What we do know and have had reaffirmed is that the stock market is volatile. So let’s take a look at what this volatile stock market means for those buying or selling real estate in Roseburg.
What the Volatile Stock Market Means for Buying Roseburg Real Estate
The volatile stock market will impact those buying (or selling) real estate in Roseburg, but maybe not as adversely as you may think. In fact, it could even benefits home buyers quite a bit. In fact, we have only seen about a 10% slowdown in our our online traffic, which isn’t much.
INTEREST RATES
The first thing to consider here is the current historic low interest rates, which was the result of the Fed’s second rate cut in March of this year. Here’s how the the experts, at RIS Media think this will shakes out:
It’s simple math, the lower the interest rate, the lower lower your mortgage payments will be. That means you qualify for more than you would at a higher rate… in other words, you can buy a higher price home than you could afford before. Also, sellers who are facing financial problems might be more motivated to sell their homes and might be willing to accept lower offer than they would have in a more stable time.
UNCERTAINTY
Still, the uncertainty of the economy can cause a lot of fear, and I respect that. Even through interest rates super low, the imediate future of the economy is a big question mark. And this means that job stability for some is far from certain, and the stock market, while it will eventually rebound, may remain low for a time. I understand that some buyers can’t depend on steady employment or their investments to help them make those monthly mortgage payments.
It might become more difficult to get a mortgage because “lenders might become more cautious than usual. They might have stricter standards to make sure they don’t issue mortgages to borrowers who might not be able to repay them. That means that it could be harder to qualify for a mortgage now than it was just recently.”
BUY NOW OR WAIT?
Buy or wait, that is the question… Whether buying or selling real estate in Roseburg right now is a good idea ultimately depends on your own unique personal situation. If you have the money for a down payment and all the other costs and you are secure in your job, now – with interest rates so low – is a good time to buy. This much is clear. If not, it is probably a wise decision to wait until the current economic climate improves.
I am available for a consult to discus what’s going on in the Douglas County real estate market. This should be another important element in your decision making.(Questions, give me a call. 541-643-1131.)
What the Volatile Stock Market Means for Selling Roseburg Real Estate
All that being said, things really aren’t as dire for those buying or selling real estate in Roseburg as some would have us believe, and things are still favorable for sellers for the most part.
INVESTMENT HEDGE
With the stock market currently dipping and remaining volatile, in my opinion, real estate is now an even better investment hedge. As an agent and real estate investor myself, I believe real estate is a safer bet than other investments right now, especially stocks. Financial experts say that “an economic slowdown may be a reason to buy real estate since this investment speaks to a variety of investor needs, including diversification and income generation.” Do you see the importance and value of holding real property investments in a portfolio during a recession? Typically, when the stock market is performing poorly, we see investors turn to real estate as a safer investment – which is good news for sellers.
GOOD AND BAD
While this may be a great time for buyers, it’s still a pretty good time for sellers. Although we have seen some people hold off from listing their home, we haven’t seen a large number of price reductions or a major drop in sales as of yet. And the reason for this, according to a recent survey, is that 70% of homebuyers have not had their ability to afford a down payment adversely impacted. Only “13% of respondents said the stock market volatility had impacted their ability to afford a down payment.”
Buyers are still out there actively searching for homes and making offers because they can’t put their life on hold because of what is going on in the world.
But it’s not all rosy for sellers because buyers are walking the thin line between “stock market declines and lower mortgage rates.” Some buyers who want to take advantage of the low rates were also counting on liquidating stock investments for the down payment, which means some are unable to buy now.
Keep in mind, it is possible that in the coming weeks or months the positive effect from low mortgage rates might die down as the possible negative economic impacts rise. Of course, this outlook could change rapidly if the country can safely get back to work soon.
BEST MARKET FOR SELLERS
Watch out, luxury home sellers! You are probably in the worst position. According to that same survey, “people who earn over $200,000 annually were more likely to say the recent volatility has impacted their ability to afford a downpayment, at 18% of respondents. Higher earners tend to have more invested in the stock markets, and therefore, would be more impacted by a stock volatility.”
Baby boomers are probably in the best position for the most part. Boomers seem to have retained their ability and desire to buy, with only 9% reporting that their ability to make a down payment has been impacted. The reason for this is that, typically, retirees and those nearing retirement “invest less of their wealth in the stock market in favor of more stable and less risky investments. It could also indicate that boomers are able to finance home purchases with other savings and equity from a current home as opposed to pulling cash from the capital markets.”
So this demographic is where sellers should target their marketing efforts. Got questions about all this real estate marketing stuff? Let’s talk 541-643-1131 or email me here.
A Good Agent Is More Important than Ever
It is always a good idea to hire a good agent, and that is done through the interviewing process. So despite the plummeting and ever-volatile stock market, the market remains pretty good for those buying or selling real estate in Roseburg. It’s just that buyers and sellers may have to get a little more creative and change their mindset, marketing, and expectations during this unprecedented time. And that means that the services of an experienced local real estate agent are more critical than ever.