As the coronavirus pandemic continues to unfold, many property owners are facing uncertainty about what lies ahead. At Electrum Properties, we’re analyzing previous economic downturns to help our clients understand what this situation means for homeowners and investors alike. Here’s our expert insight on what real estate investors in Lubbock should anticipate during these challenging times.
Buyer’s Market Emerging
The real estate landscape is shifting toward fewer buyers and more available properties. This fundamental change gives buyers significant leverage during negotiations. With decreased demand for homes, sellers will likely need to adjust their expectations and accept offers that align with what buyers are willing to pay in this new economic reality.
Property Value Adjustments
With income disruptions affecting many homeowners’ ability to make mortgage payments, we anticipate an increase in distressed properties entering the market. This creates valuable opportunities for investors to acquire properties below market value. Negotiation leverage will expand for traditional purchases as well. Housing prices will likely plateau or decrease, while new construction demand may wane as existing properties become more readily available and competitively priced.
Increase in Motivated Sellers
For solution-focused investors, the pandemic presents opportunities through increased distressed property sales. With unprecedented unemployment levels, many homeowners find themselves in difficult financial situations where selling quickly becomes their best option for financial relief. These motivated sellers typically prioritize speed and certainty over maximum price, especially when receiving limited offers. However, at Electrum Properties, we emphasize creating win-win solutions—recognizing that sellers may be under emotional strain and deserve to be treated with empathy and fairness throughout the transaction.
Rental Market Challenges
Investors with short-term or vacation rentals should prepare for significantly reduced occupancy rates during the pandemic. With stay-at-home orders affecting travel and many potential guests experiencing income reductions, the vacation rental market faces substantial headwinds. Strategic investors might consider temporary rate adjustments to attract the limited pool of renters. Even partial rental income can help offset ongoing property expenses while positioning your investment for the eventual market recovery.
Eviction and Foreclosure Moratoriums
Real estate investors in Lubbock must adjust to temporary suspensions of evictions and foreclosures during this crisis. The unprecedented level of unemployment from essential-only work orders has left many tenants struggling to cover basic necessities, let alone housing costs. While evictions would normally proceed for non-payment, current circumstances require patience and flexibility from property owners. Similarly, homeowners with mortgages who have lost income may receive temporary foreclosure protection. These measures aim to prevent a housing crisis while giving affected individuals time to recover financially.
More Stringent Lending Standards
Despite historically low mortgage rates triggering a surge in loan applications, lenders are implementing stricter qualification requirements to manage risk. To avoid over-extending during uncertain economic times, mortgage originators are likely to demand higher credit scores and larger down payments from borrowers. Cash buyers and those with strong financial profiles will have distinct advantages in this evolving lending environment.