Why buying real estate may be a bad deal for you amid the pandemic - Business Insider

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Why buying real estate may be a bad deal for you amid the pandemic

Take Baltimore and San Antonio, for example. Both are notably more affordable housing markets — but their housing supply has plummeted 20% year-over-year amid the pandemic. Meanwhile, the supply in expensive cities like New York and San Francisco has surged, while demand dwindles.

In Baltimore, buyers outnumbering sellers has contributed to elevated home prices. "Buyers are willing to pay more for a house than I've ever seen — I'm talking $30,000 to $50,000 over the listing price," Dan Borowy, a Baltimore real estate agent, told Redfin. "They're desperate because homes are flying off the market so quickly. I'm selling all of the homes I'm listing within three days."surveyed 1,000 homeowners with a mortgage in late August.

Roughly 30% of those with regrets cited financial struggles. Even with low interest rates, payments become more difficult to manage as the pandemic continues to sink the country into a recession. Another 10% said social reasons fueled their regret, while 7% reported that they were not prepared for homeownership, and 8% reported another miscellaneous reason.that as of the end of July, the lower mortgage rates have given buyers an extra 6.9% in purchasing power, but prices were up 8.2% year-over-year, wiping that out.

 

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