The Impact of Coronavirus on the Real Estate Market and Home Prices
The coronavirus has ground the American economy and way of everyday life to a halt. States such as California and New York have instituted shelter in place policies and once-bustling city centers have become barren wastelands. We all know that the economy is feeling the negative effects but what about the relationship between coronavirus and home prices?
The Effects of Coronavirus in the Real Estate Industry.
The real estate industry was partially to blame for the last economic recession. Will the effects felt by the coronavirus have a lasting impact on home prices this time around? According to data collected by ShowingTime, the real estate industry’s leading showing management provider, showing activity has suffered a sharp decline in recent weeks. In fact, the number of home showings booked in a given week has fallen close to 70% and is expected to continue to decline.
Will My Home Lose Value due to the Coronavirus?
Home showings are suffering a decline but does that have an impact on the value of my home? Not exactly, at least in the short term. The slowdown in home showings will cause a slowdown in sales during March and April. The best-case scenario is that a home buyer who was previously anticipating purchasing a home in March or April has simply delayed their timeline by a month or two.
Keep in mind that there is a lot of uncertainty in the world right now and deciding to purchase a home is a major life decision. There are still many questions that must be answered about the coronavirus let alone the impact it will have on the job market and the economy. The declines in the stock market will also have a negative effect on a buyer’s appetite for purchasing a home as they see their savings diminish.
Some of the hardest-hit industries such as the hospitality industry are already feeling the economic impact and laying off employees. A rise in the unemployment rate and home prices have an inverse relationship meaning if unemployment continues to rise, the value of homes will decrease.
What are the Long Term Effects of Coronavirus on Home Prices?
While it does not look like the coronavirus will have an impact on home prices over the short term, it is important to be aware of long term market forces. If we cannot contain the virus and the economic impact that results from it, there will likely be a lasting effect on home prices. To make sure this does not happen, government officials are attempting to stimulate the economy with monetary and fiscal stimulus programs. Interest rates are already at historic lows and Americans need to be reassured that if they do get laid off for a period of time, they will not have to suffer the same fate as so many did in 2008 with unforeseen foreclosures.
Is it a Smart Idea to Buy a Home when there is so much Uncertainty Surrounding Coronavirus and Home Prices?
At Felix Homes Realty, we look at the buying process like you would any investment decision. After all, for most families, their home is their largest investment. Ask Warren Buffett or any successful investor and they will tell you to buy when others are scared. If you are financially secure and do not believe you are at risk of being laid off, then it is a great time to buy a home. Interest rates are at historic lows and as a buyer in this market, you will have the benefit of commanding the upper hand in negotiating a great deal.
Is there a way to view homes without having to see them in person?
Felix Homes is a technology company first and a real estate brokerage second. We incorporate technology into everything we do from our complimentary drone photography to our digital marketing expertise. Last week, we announced that we will be offering virtual open houses and virtual showings for any listing in Middle Tennessee.
How can I Follow the Effects of Coronavirus in the Real Estate Industry?
Whether you are a home buyer, potential seller or just someone who is generally interested in following the correlation between the coronavirus and the real estate market in Nashville, send an email to email@example.com and let us know your opinion of the effects of coronavirus in the real estate industry.