On the mind of many Kirkland residents is the novel coronavirus, the virus that causes the COVID-19 disease. As the virus has spread across the world, markets took a hit, prompting the Federal Reserve to issue a surprise interest rate cut. Now, mortgage rates have reached three-year lows, which John L. Scott chairman and CEO J. Lennox Scott said should help the housing market sustain strong momentum.
Mona Spencer, branch manager for John L. Scott’s Redmond office, said her office hasn’t seen a direct impact from the coronavirus situation yet. However, she said stock market plunges always tend to have a ripple effect in our local housing market.
“We have had buyers and sellers ask questions about whether or not they should put their house on the market now,” said Spencer. “Consumers are anticipating that the virus may spread, leading stock prices to go down, and as a result the buying power of consumers may be decreased.”
Housing analysts say the luxury housing market could be the most vulnerable to free falls in the stock market, as wealthy buyers tend to have more money tied up in the stock market. However, historically low interest rates for home mortgages may entice buyers to enter the market.
Additionally, current homeowners who are not selling could consider refinancing if a few factors pencil out favorably — including the interest rate differential, how long you plan to live in your home and the cost to refinance.
“These low interest rates can make refinancing appealing to some current homeowners who aren’t planning a move,” Spencer said. “Like many situations in real estate, what’s best in one situation may not make sense in another. Therefore, chatting with a trusted broker is my first recommendation to determine if refinancing may be the right move.”
Though time will tell the impact of coronavirus to the local real estate market, one thing is for sure: inventory in Kirkland remains constrained.
“The local real estate market is hot,” said Spencer. “Buyers need to be ready, willing and able to allow the seller to be in the driver’s seat if they want to get the home in what is likely to be a multiple-offer situation. Sellers on the other hand are thrilled to see the price appreciation they are able to secure in the market today.”
Looking forward, Spencer anticipates much of the same — she said the quick-action market is likely to last through the end of the year, if not longer. Though the odds are stacked in favor of sellers, she said those looking to sell still need to be strategic in their approach.
“Sellers still need to be smart about pricing,” said Spencer. “It is better for sellers to list at the lower end of the pricing scale and get bumped up if they are in a great location with a home that is market-ready inside and out. A knowledgeable broker will employ the best pricing strategies to ensure success.”