CUYAHOGA COUNTY, Ohio — The coronavirus has caused a significant impact on the real estate market and mortgage rates, which is actually good news for buyers.
“The market is on fire," said Sally Messinger, a Cleveland real estate agent with Howard Hanna.
Real estate agents like Messinger said the current housing market is roaring all across Northeast Ohio in a way she’s never seen before in her 39 years on the job.
“It’s hot. We're getting multiple offers on houses, and many, many houses are selling over the asking price which is higher than it would have sold for last year or any previous year," she said.
“I'm anticipating having to go in with a strong offer when we do decide on a house that we want," said Lisa Karnstein. She and her husband are looking to buy a home in the Cleveland area.
It’s a seller’s market. The demand is high and inventory is low. Plus, experts said record-low mortgage rates might make right now the perfect time to refinance or find your next home.
“Folks can refinance for various reasons. Number one is to save money, but also you can reduce your term right. If you're on a 30 or a 20 year, you could go to a 15 year or, frankly, you can cash out of your house and pay down your high interest credit card debt, right at a much, much lower fixed rate, right. So, there are a lot of reasons that people can refinance, but this is a really, really good time historically because rates are so low. So, almost everybody can save, but even if you're not saving on a direct comparison 30 year to 30 year, there are many other ways that you can either use the money or save money as well," said Abe Kahan, president of Home Lending at KeyBank.
Kahan said the low rates are happening now thanks to the Federal Reserve continuing to inject billions into Mortgage Backed Securities.
According to Freddie Mac, as of July 16, mortgage rates fell below 3 percent for the first time in 50 years.
It’s helping buyers get more bang for their buck.
“I mean it's free money right and who doesn't want to be able to use their money someplace else," said Karnstein.
“Buyers who are on the edge, who at one time maybe they couldn't afford that $200,000 or $250,000 house when the interest rates was four, four and a half. Now, at two and a half, they can do it," said Messinger.
Coronavirus and working from home has changed just about everything in the real estate game — including what’s on the wishlist.
“They need more space, they need outdoor space. The house behind me has beautiful pond, and that was a big interest that people now much more so than it would have been. With pools that were hard to sell two years ago, people love them because they've got kids and it's just a totally different market in real estate," said Messinger.
Kahan said every indication at this point shows that this positive interest rate environment likely will continue for the next 18 months.
"You may not realize, but most people can save $200, $300, $400 or $500 a month by simply refinancing their existing mortgage. So, I think it's important to call that out," said Kahan.