May 8, 2020 –
Keep in mind that the housing market is strong and resilient. Everyone needs a place to live, and in previous recessions (other than that of 2008), housing prices have actually increased or remained steady. I predict the current climate could lead to a significant drop in real estate values in the short term, at least in markets that are overly inflated (South Florida and Las Vegas, for example).
COVID-19 has been a disaster to many industries, including real estate. Sales have dropped to dangerous numbers and people are choosing to keep away from open houses. Normally, the industry would be in panic. Many would recall the great recession of 2008 and how it damaged the housing market. However, this time around, many professionals are keeping their hopes up and with good reason.
I believe that now is the perfect time to buy real estate. I’ll tell you why.
- Low Inventory
Housing prices are going down. Even if states reopen today, prices will take some time to recover to their numbers before the pandemic. Low inventory typically results in a sellers market. For a buyer, this is a bad scenario as most of the power through the transaction lies with the seller. Sellers will be receiving large amounts of offers that can easily go beyond the properties’ value in a normal market. 2020 was a sellers market because of the historically low number of homes put for sale. This means that prices will likely go up once the industry settles back in.
- Low interest rates
To aid the real estate industry during COVID, the government lowered interest rates close to zero. We are completely sure how long this policy will be retained. However, there is a good chance that it will sustain until the market returns to normal. Therefore, once the pandemic is over and open houses are active again. More buyers could be interested to take advantage of these new rates.
- COVID-19 is not the great recession
Almost every industry has been disrupted by COVID. 2020 will be a recession year for our country. But this recession is not going to be like the great depression or the great recession. This recession was not caused by the collapse of banks and wall street. To most, recovery will happen once people are allowed to be on the street again. The economy can return to respectable numbers once businesses are reopened. This logic applies the same for real estate. Buyers and sellers will quickly return to their normal self.
People may not want to go to open houses right now. That is a shame because sellers need to sell now. They no longer have the plethora of options to choose from. Your offer has a much better chance to go through at this very moment. If you prefer not to go to an open house, there are multiple options such as virtual tours that allow everything to be conducted online. If you are willing to do a deal that way, you may just land yourself a property with a deal that will not come around everyday.