Otay Ranch
Mortgage rates have helped to prop up homes sales during the pandemic. Developer Baldwin & Sons has continued to see interest and active sales from homebuyers during the pandemic. While the fringe buyers have exited the market—decreasing activity—serious buyers have continued to look and have actually ben fueled by lower interest rates.
"Mortgage rates have drifted downward and are currently hovering at historic lows. Rates represent an incredible financial incentive to purchase now," Melissa Hazlett, VP of sales and marketing for Baldwin & Sons. "While some fringe buyers have indeed exited the market, serious buyers remain and are responding favorably. Mortgage applications have reportedly increased in response to the highly attractive rates and there are still many serious buyers are still in the market."
Unemployment rates and shelter-in-place restrictions will no doubt put downward pressure on sales activity, particularly in the short-term. However, the developer is expecting a quick recovery. "The country has sadly experienced a marked spike in unemployment and furloughed workers," says Hazlett. "We are all hoping that situation turns around as quickly as possible. However, there are many people with secure jobs and income who remain in the market and who are willing and able to take advantage of the incredible finance rates."
Housing is not only an essential need, but it is also suffering from a severe supply shortage—and the pandemic will only exacerbate the problem. The shortage of housing will also help to drive housing sales later this year. "The state's housing supply is an ongoing concern likely considered by the governor when he decided to allow construction to move forward," says Hazlett. "Many sites have remained active with precautions in place to reduce exposure risk and keep crewmembers safe."
In addition to the supply shortage, home sale volumes have held up simply because people have to meet life needs. For example, some families are growing or downsizing and need to accommodate those shifts. "Life doesn't stop," says Hazlett. "Even in times of uncertainty, life goes on. There are a number of milestones, as well as shifting family configurations, that occur in life. Home and space needs fluctuate in response and thus homes will always be in demand."
Just as home buying hasn't stopped, neither has home development. Construction was deemed essential in California, and builders have kept projects moving. "Because our industry is deemed essential, many builders are actually constructing multiple home phases simultaneously in order to keep on schedule to deliver the homes purchased in the first quarter," says Hazlett. These builders expect demand to hold up through this downturn, and will be ready with homes for those buyers to purchase.
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Kelsi Maree Borland
