As the U.S. was enjoying a flourishing housing market in January and February, a sanitary crisis came crashing in. With a potential recession in its tow, how will the housing market react?
A Good Time to Hold on to Our House
In the beginning of the year, no one could have predicted that the economy would be disrupted so strongly that the world could face an important recession. However, with the COVID-19 pandemic forcing many countries to lockdown its citizens inside their home, for a long period of time (one to three months in most cases), many businesses are on the brink of bankruptcy and the world is still unsure on how to come out of this situation.
The coronavirus has basically stopped the housing market in its tracks, since people could not come out of their homes for anything else than shopping for basic necessities. The only visits available to potential house buyers were virtual tours and it has become almost impossible to close, except for those with an electronic signature. But even that may not be enough as there are often requirements by law that need verification on site, which are currently not possible.
As we have seen in previous outbreaks (SARS in Hong Kong and COVID-19 in China), the number of houses on the market tend to decrease, as people prefer to hold on to their home during these difficult times. This might be the perfect moment to renew our living spaces with the help of a home enhancement magazine.
The Future of the Market
The COVID-19 pandemic will affect the housing market in many different ways. The simple act of showing houses will become more difficult as realtors will need to take in account social distancing. This should definitely translate in an increase of the use of new technologies where the salesperson and the potential clients can visit a house together, through a virtual tour. It lets clients ask all the questions that come to their minds, while the agent indicates all the hidden qualities and advantages of the house which can’t be seen just by looking at a 3D video of the various rooms.
Then, the whole economic situation will come in and change the market. The recession has been a constant topic on the news and most specialists envision a long one on the horizon with unemployment hitting record highs. Therefore, we can easily imagine that the housing market will suffer from a low-level of confidence which should show through an important reduction of the number of transactions in the months to come.
Could this be a Good Opportunity?
For those who were thinking of selling their house before the crisis started and are still entertaining the thought, the lower number of houses on the market could play in your favour in the end. It will just be a little more complicated when it comes to showing the house and closing all the paperwork.
And if you were a buyer, it might still be a good time for you to get the house of your dream. After all, the mortgage rates are still really low (although volatile). So if you are one of the lucky ones whose job hasn’t been affected by the sanitary crisis, this might just be an opportunity for you.