The hard truth is that COVID-19 has taken a toll on the real estate market just like it has on every part of our global, national, and local society. If the progression is anything like what we saw during and after the SARS epidemic, the trend will grow until the virus peaks and then there will be residual fallout for a period of time. Activity will eventually increase again as the virus subsides, settling back into a stable rhythm. So, when we take our lessons from both history and science, we can speculate that the real estate market will improve once the spread of the Coronavirus is stopped or slowed. In the meantime, it’s important to know what’s happened so far and what to expect from the real estate market as we move forward in 2020.
Initially, when US public interest turned to coverage about the virus and certainly when stay-at-home orders were implemented, mortgage interest rates fell dramatically. In fact, the average fixed-mortgage interest rate hit a 30-year low on March 4th of this year. But, the historically low rates haven’t been enough to sustain the kind of active market we enjoyed before COVID-19. And, that honestly makes sense. Two factors are mainly contributing to the lull in buyer and seller activity: financial uncertainty and personal exposure concerns or orders to stay at home from a governmental level. Sellers are concerned about the price at which they can list their house during a period of a depressed-buyer market. Many buyers have either experienced a change in finances or are concerned they might and are holding back on starting their search. Even the pragmatics are difficult right now–who wants to move in the middle of a pandemic?
The truth is that we’ve seen a slight drop in house prices already, and it’s likely that trend will continue until the virus subsides. Homes that were on the market before the pandemic arose are having price drops, and new listings are “priced to sell.” So, this creates a clear opportunity for one group of buyers–anyone whose finances haven’t been altered. There are always silver linings to be found, and this is a situation where someone could find their dream home at a price they can actually afford. Stressed finances for the length of the virus’s effects will result in more homes on the market and fewer buyers’ offers with which to compete; this could be your golden opportunity to find a property that would have been out of financial reach before.
And, if not, as we’ve seen in the past, this is not forever. Even now, real estate agents are listing new properties and have tons of digital tools to help clients navigate the market during the present epidemic and into the future. Many are still going on occasional in-person showings if clients prefer, since real estate is considered an essential business in most states. But, a lot of agents have upped their digital game, investing in drones to capture 3-D coverage of their listings, hosting video tours, and downloading software to allow all parties to virtually sign official documents on a secure platform. All of the other online home-shopping tools we’ve already become accustomed to (think apps like Zillow and Trulia) will continue to play a vital role in our experience navigating the real estate landscape over the course of 2020 and beyond.
If you’re thinking about buying or selling in the coming year, your best bet is to partner with a knowledgeable, professional real estate agent. The advice of a trusted professional is invaluable in aiding a real estate transaction.