The real estate market is one of the most affected by the coronavirus crisis. Many people who were in the process of buying a house before confinement found that everything stopped and then the uncertain situation raised questions about whether it is time to buy a house.

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In today's blog we will analyze what the current situation is for the sale and if it is a good time to buy a home and get a mortgage. Let us begin!

The health crisis and the real estate market

We are currently experiencing a crisis, both health and economic. The coronavirus has caused many problems for families and businesses, the lockdown has caused everything to be paused and currently, the possibility of a second lockdown remains.

The real estate market was undoubtedly affected, starting with the simple fact that houses could not be visited or appraisals made. It is estimated that in 2020 there will be 30-40% falls in real estate transactions.

Along with this drop in transactions, there is a drop in demand and, little by little, we will begin to see a consequent drop in prices of 6-9% during 2020 and 2021. But there is no need to be alarmed either, the drops They won't be as drastic as we might imagine either, but they will certainly benefit buyers.

Another big change that is expected is a further increase in the demand for rentals, many people, left without the option to buy for work and economic reasons as a result of COVID, choose to rent a home . According to the analysis of experts in the sector, the rental market will not be as affected as we might have initially thought.

Is it time to buy a home? The price of the house

The evolution of the price of the house is one of the factors that most concern both owners and buyers. First of all, it should be noted that, for the moment, it seems that the real estate market is better prepared to face this crisis than that of 2008.

In March, when the State of Alarm was declared, a 1.6% drop in house prices could be seen, that is, 0.4% less than the previous year. Currently, the data continue to be more favorable than with the previous financial crisis, being 13.7% above the minimum registered than with the economic crisis of 2008.

The latest reports that have come out indicate that during the end of 2020 and all of 2021, we can begin to see that price drop reaching up to 9%. Currently, prices are frozen, there is neither a rise nor a noticeable decrease, this is because the owners are waiting to see what happens in the hope of being able to sell at a higher price.

Everything indicates that sooner or later they will have to start lowering prices due to the low demand in 2020, falling by up to 35%. In 2021, demand is expected to recover little by little, up to 30%.

Variable mortgages and the Euribor

Unable to do appraisals during confinement, mortgage applications were paused and many backed down. At this time, banks offer more facilities and assistance to obtain a mortgage, but this will not last forever and in the near future it is most likely that they will become more expensive.

If you are thinking of buying a home, now is the time , since it is easier to access a mortgage if you meet the requirements and, in addition, the Euribor is at historical lows so the interests will be much lower, in case of hiring a variable mortgage.

Conclusions: is it time to buy a home?

If you have been looking to buy a home for some time, without a doubt, now is the time. It is true that housing prices will take a little longer to drop, but this drop will not be noticeable, and also, right now applying for a mortgage is cheaper than in a few months.

Our recommendation is:

• Mortgage. If you want to buy a home with a mortgage, without a doubt, now is the time, especially if you want a variable interest one.
• Cash. If you do not need to apply for a mortgage, our recommendation is that you wait for the house to drop more in price.

If you are interested in buying a home, do not hesitate to contact our Real Estate team , we will be happy to help you get the house of your dreams. Also, if you need financing, we have a team of 60 financial brokers accredited by the Bank of Spain that can get you the best mortgage on the market.

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