How has the coronavirus impacted our real estate market?
Let us first say we hope everyone is staying safe during this coronavirus pandemic. Our thoughts and prayers are with you.
Now, many buyers and sellers are wondering what effect the coronavirus is having on the real estate market. Prior to the pandemic, our market was already a bit challenging. In some areas, the housing supply had dropped to near-record lows.
According to Zillow economist Jeff Tucker, “The housing supply was low, but on the demand side, there is and will be a lot of buyers in the market, based on key indicators of traffic on Zillow and Redfin.”
Why is the demand for housing so high? Low unemployment, solid wage growth, and low mortgage rates. A stock market correction, as concerning as it may be, doesn’t change these circumstances. The housing market is very durable, even in full-blown recessions. In some previous recessions, home prices increased.
Another thing to consider is that, as the stock market drops, investors look for safer places to park their wealth, whether that means the bond market or actual real estate. Roofstock, a platform investors use to buy and sell single-family rentals, has seen huge spikes in web traffic since the coronavirus outbreak. This supports the idea that global investors look for less volatile investment options. If investors think it’s a good time to put money into real estate, maybe we should follow suit.
The coronavirus is the wildcard in our real estate market, and if its impact is prolonged and produces a minor recession, it could put a damper on demand. The bright side is that buyers in competitive markets would have a better chance of getting a home.
We don’t want to induce fear or panic. Based on everything we’ve read, we seriously doubt there will be a drop in home values. Experts predict equity growth to slow down compared to what it’s been the past few years, but it’s still a great time to buy or sell a home.
If you have questions about our market, don’t hesitate to reach out to us. We’re here to calm your fears and assist you in buying your dream home or selling a home that’s no longer a good fit for you. We’re here to help.