With rapidly changing Covid-19 developments and increasing restrictions on social distance and commerce, many fix-and-flip investors are wondering what challenges they will face selling house flips in a Covid-19 impacted real estate market.
Historically speaking, the months of March through July are the busiest and most lucrative months of the year to sell a house opens in a new window. This year, with the fear and uncertainty brought by the Covid-19 pandemic, that may not hold true for many, if not most, real estate markets across the country.
Sharp Decline Expected in New and Existing Home Sales
Financial experts agree that the sudden decline in economic activity that began in mid-March will result in a decline in home sales. Recent data from the U.S. Department of Commerce foreshadows the looming impact of Covid-19 on the housing sector: "After reaching an 11-year high in February of this year, U.S. mortgage applications plummeted 29.4% in the week ending March 20."
How Can a Fix-and-Flip Investor Sell Their House Flips in This Climate?
Although nationally, declines in home sales are expected, local real estate markets are performing vastly different from each other, and sales of house flips will depend heavily on how Covid-19 is impacting local conditions. For example, new housing starts may be down in your local market, while existing homes are still moving. Newer homes with higher price tags may sit longer, while a competitively-priced house flip may move quickly. Now, more than ever, you have to do your homework to determine project viability opens in a new window in your local market.
An example of a real estate market one would expect to have recently come to a grinding halt is Seattle, Washington, which is believed to be where Covid-19 established its foothold opens in a new window in the United States. However, homes in Seattle are currently selling for .6% over asking price because there is extremely low inventory in the Seattle real estate market for home buyers to choose from.
Do Your House Flips Provide Advantages to Ready Buyers?
The most important thing a flip investor can do in these challenging times is to make sure their house flips have the amenities buyers are looking for opens in a new window and are listed at a price the local market will bear. More than ever, attention to quality workmanship is essential opens in a new window.
A crucial advantage you must provide to prospective buyers who are practicing social distancing, is an opportunity to tour your property virtually. Work with your real estate agent to make sure your house flips are listed on all of the free real estate search sites. Also, make sure your listings are presented in their best possible light. More than ever, home buyers will be depending less on agents for home tours, and will instead be using these online real estate sites to help narrow down their prospects.
It is critical that you pay close attention to detail and make sure your online listings are completely accurate in regards to location, bedroom count and square footage--as well as all of the appealing amenities you would otherwise point out at an open house or in-person walk-through.
To make your listing as attractive as possible, consider hiring a virtual staging expert to provide an enhanced tour experience for prospective buyers. With a virtual home staging company you send in photos of your empty rooms, and they digitally insert furnishings and decor. Virtual home stagers can provide high definition photos for a reasonable price.
If you plan to stage your homes yourself, or if you have hired a staging company to physically stage your house flips, make sure you have plenty of stunning photos and a 3-D video tour available for buyers to clearly see and appreciate what your home has to offer.