I hope you and your loved ones continue to stay safe and healthy. The coronavirus continues to dominate every aspect of our lives, both here in the United States and across the globe, and even though it can be hard to stay up to date with the latest changes, it is my goal to keep you informed of what has been happening in the real estate market.
Housing does not always follow other markets in a health crisis, but there are bound to be impacts on the housing market, whether direct or indirect. Here is some information on housing and COVID-19:
- A Zillow study regarding the behaviors of the housing market during previous pandemics gave sellers a somewhat reassuring conclusion: While the number of home sales dropped dramatically during previous outbreaks, home prices stayed roughly the same (or only dropped slightly). That makes sense; fewer transactions make it harder for prices to change. Essentially, the market goes on pause during outbreaks like these. This pandemic is not like any other, and we are not making a direct comparison, but from what we are seeing in our own Arizona market, the same type of response seems to be happening.
- The federal government has come together to create a $2 trillion stimulus package to help individuals and businesses who are suffering from economic strain, health issues, and job loss. This can help home owners who are struggling to make payments.
- If you’re concerned about your overall financial health, here’s a guide from Forbes magazine that details various strategies you can employ to protect your finances during the coronavirus pandemic.
As best it can, the real estate industry will continue to operate during these trying times. Agents across the nation are taking precautions to keep themselves and their clients safe as they navigate transactions, interacting with clients remotely when possible, limiting the number of people who come to a home’s showings, and/or leveraging virtual home tours to replace in-person contact as much as possible.
In Arizona, market supply was low and demand was high going into this pandemic, and we expect, when things start to return to a “normal” market, where our health and the health of loved ones is not at risk any longer, the pent up demand will help us make up lost ground. For now, homes will not likely sell in as timely a manner and we will need to be patient as the numbers will reflect a short term issue and not necessarily the big picture. Market numbers will be better when we get through this – and we will get through this.
One of our analysts at the trusted Cromford Report noted that at this point the housing market is like a kinked hose. There is a bit of activity making it’s way through, but the significant demand is behind the “kinked” portion of that hose. Once that hose is “unkinked” and the buyers are comfortable and ready to proceed, we expect a surge of activity with our buyers. There is a long way before we will see prices drop. This pandemic is unchartered territory, but we are confident our market will bounce back as it always has.
Let’s keep up the social distancing, let’s keep washing, washing, washing our hands, and let’s help each other stay healthy.