The COVID-19 pandemic has made life anything but normal.
But how has it affected the housing market, and what does that mean for investors interested in flipping homes? With a healthy level of liquidity, some creative problem-solving, a solid plan, and a thorough understanding of your local market, you could still be profitable in the long run.
Has the Pandemic Affected Flipping Homes?
A study by Zillow dove deep into research and data from past global pandemics to shed some light on what the future could hold for the housing market during the COVID-19 pandemic. It concluded that, in the past, pandemics have essentially put the housing market on pause. So, home prices will likely stay the same or see a slight decrease. That means this could still be an opportunistic time to purchase a home with plans to renovate. Many markets started the spring with very low interest rates and new inventory, which could mean great real estate opportunities for investors and homebuyers.
How Has Remodeling Been Affected?
The number of consumers who wish to remodel their homes has dropped during the pandemic. What does that mean? There are probably many contractors who are out of work or have a pretty open schedule and might be ready to jump on the next chance to do some remodeling work. A survey done by the NAHB shows that there has been a slowdown in the general willingness for homeowners to remodel and the rate of inquiries coming in. However, the supply of building materials and products has not been affected much. Many of the concerns homeowners have aren’t as much of a concern if you are an investor ready to start flipping homes. During the renovation process, there won’t be any people residing in the home, so contractors can safely work while maintaining any social distancing needed.
The Value in Flipping Homes
Newer homes with a higher price tag are more likely to sit longer, while flipping homes with a competitive price could move much quicker. As an investor, if you ensure that your flipped house has the amenities buyers are looking for, it will be a no-brainer to them on which property is worth purchasing at this time. Again, much of this depends on the local market you are in, so do your research before you make a big decision. A perfect example of an unexpected market trend is happening in Seattle, WA. Even though many believe that this is where COVID-19 established itself in the United States, they have seen an increase of 0.6% over asking price. So, be sure you know the market you are looking to buy in.
How Are Consumers Reacting?
With home tours and appraisals having been affected by social distancing guidelines, things hit a bit of a slowdown. However, there are ways around this as we start to see life go back to some version of “normal.” Virtual tours may be very advantageous as well as ensuring the house is listed on all of the free real estate search websites. Shoppers interested in buying a home will be using these sites as their first stop in narrowing down their prospects.
Ready To Make An Investment?
Boomerang Capital has helped with thousands of homes and hundreds of millions of dollars of funding across the country. We understand what you need to get the work done and accomplish your goals. If you’re interested in non-traditional financing solutions for a fix and flip project, contact us today for a free quote.