Coronavirus and Housing
The Coronavirus (COVID-19) has caused massive global uncertainty, including a U.S. stock market correction no one could have seen coming. While much of the news has been about the effect on various markets, let’s also acknowledge the true impact it continues to have on lives and families around the world.
With all this uncertainty, how do you make powerful and confident decisions in regard to your real estate plans?
The National Association of Realtors (NAR) anticipates:
“At the very least, the coronavirus could cause some people to put home sales on hold.”
While this is an understandable approach, it is important to balance that with how it may end up costing you in the long run. If you’re considering buying or selling a home, it is key to educate yourself so that you can make thoughtful and intentional next steps for your future.
Interest Rates
For example, when there’s fear in the world, we see lower mortgage interest rates as investors flee stocks for the safety of U.S. bonds. This connection should be considered when making real estate decisions.
According to the National Association of Home Builders (NAHB):
“The Fed’s action was expected but perhaps not to this degree and timing. And the policy change was consistent with recent declines for interest rates in the bond market. These declines should push mortgage interest rates closer to a low 3% average for the 30-year fixed rate mortgage.”
This is exactly what we’re experiencing right now as mortgage interest rates hover at the lowest levels in the history of the housing market.
Orange County Coronavirus and Housing
According to Steven Thomas, Economist with the OC Housing Report, “[t]he Coronavirus may affect the housing market to some degree, but not to the extent that many fret about.” Thomas suggests that the current lack of inventory coupled with the drop in interest rates will continue to fuel a strong seller’s market, and “…will help to prop up the housing market.” Thomas goes on to say that the United States macroeconomic charts are still really strong and though the GDP could take a hit it most likely will not drop below zero. His prediction is that for every buyer that decides not to purchase because of fears of uncertainty “fence sitters”, there will be more buyers looking to cash in on these record low mortgage rates. For all markets in Orange County with the exception of the Luxury End, we are still in a hot seller’s market.
Bottom Line
The full impact of the Coronavirus is still not yet known. It is in times like these that working with an informed and educated real estate professional can make all the difference in the world. If you are considering making a move in the near future let’s talk.
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