Over the past few days the World Health Organization declared the spread of Coronavirus a pandemic. Schools and businesses have closed, companies are encouraging or requiring staff to work from home, and the stock market has been in flux (to say the least). The most recent recommendation from the Centers for Disease Control is that all gatherings of more than 50 people should be cancelled.
What does all of this mean for home values? What does it mean for those who are buying or selling homes as we approach the typical height of the Spring real estate market? The short answer is that it’s really too early to tell exactly what’s going to happen but I think that we can all agree that with major disruption to our day-to-day lives we can expect some changes going forward.
On the one hand, real estate is generally considered a safe investment. Except for rare cases, home values goes up. Prices dropped in the crash of 2008 but have been on the rise since the bottom of the market, generally around 2012. After the crash the general message from the real estate industry was “It’s a great time to buy!” While true for some, it certainly wasn’t true for everyone. While people need homes they’re also concerned about income security and it wasn’t a great time to buy for those who’s livelihood was threatened, or worse.
Home Values & Coronavirus
At this point, I believe that it’s too early to see any real and measurable impact on the local real estate market here in the Philadelphia area. We only started hearing major news of the effects in Montgomery County in the middle of last week. Anyone who was getting ready to put their home on the market was already under way by that point. Buyers are still facing a shortage of inventory and seeing multiple offers on homes.
There’s a lot of news about the Fed having cut interest rates to zero but it’s important to know that this doesn’t mean that mortgage interest rates are at zero. In fact, at this point, mortgage rates aren’t affected. Despite that, mortgage interest rates are at historic lows. It’s a safe bet that the low interest rates will continue to spur demand for homes in the near term.
Social Distancing & Real Estate
Social Distancing should be taken into consideration when buying or selling a home. For many sellers that probably means skipping the open house. The vast majority of open house attendees are ‘lookers’ who are considering buying a house sometime in the future rather than those who want to buy a home now. If your home goes on the market, it’s open anyway. Serious buyers will contact their agent for showings. By avoiding the open house you can limit the number of unnecessary visitors walking through your home.
Real estate sales involve a lot of face-to-face interaction. But, contact can be limited in a lot of ways. Instead of meeting face-to-face to discuss the home buying process, I’m arranging phone calls with clients. If you’re selling your home a video walk through can be helpful. Those with serious interest will still need to see your home in-person before making an offer but a video can help limit the number of showings by weeding out those with little real interest.
As a Realtor, I’m showing homes to clients and meeting clients to help them as they sell their home. As a precaution, we’re not shaking hands and trying to keep an appropriate distance. I’m glad to know that everyone is now washing their hands, but there’s just no need to get that close right now.
It’s a good ideal to sanitize your home before and after showings. Wipe down door knobs, switch plates, and other surfaces. Likewise, home buyers should sanitize their hands before an after showings as a precaution to keep themselves and others safe.
Support Neighborhood Businesses
Our neighborhood businesses are vital to the local economy and many of these businesses are taking it on the chin. In many areas businesses are being forced to close for an extended period. For those that remain open you can contact them to see how you can help. Many restaurants are now offering curb-side pickup as an option. You can also order gift certificates from local businesses which gives them cash in hand now that can help them through these difficult times.
If you have questions about the real estate market during these very unusual times please don’t hesitate to ask. I don’t have all of the answers but will do my best to keep you informed. You can email me at email@example.com.