COVID19 and real estate

Hello friends,

While it might be surprising to many, banks are being inundated with applications for new mortgages.  This is largely due to the fact that real estate markets, with the notable exception of the 2008 recession, are generally minimally effected by recessions or extraordinary events such as COVID19.  Real estate prices move one way or the other based on the interplay between supply and demand.  And right now, even though March 2020 closings are about 25% below March 2019 closings, prices are still remaining stable and in certain areas actually increasing!  How can this be?  Well, as it turns out many sellers and would be sellers are keeping their homes off the market because they’re concluding that this is not a good time to sell.  The net result of this hesitance to sell now is causing a noticeable decrease in the amount of available housing inventories, and that places upward pressure on prices.

See here: https://www.yahoo.com/money/mortgage-applications-for-home-purchases-spike-despite-pandemic-200710195.html

So if you’ve been considering making a move, please know that’s it’s still indeed possible.

Whenever we’re considering bringing a home to market, it’s worth taking note of the overall local and national socio economic conditions, and how those factors could potentially effect consumer behavior.  I make it a point to continually keep tabs on what people are reading so as to be able to intelligently address buyer objections.  The question has come up in recent weeks about what the Coronavirus could do to real estate markets.  Fact is, no one really knows.  Commodity markets, of which real estate certainly is, do not like uncertainty.  We’re seeing the effect of such on the stock market.  Real estate markets will take longer to react, if at all, because it’s not an investment that you can quickly get in or out of such as stocks of bonds.  As the ten year treasury note is seeing historically low yields, and since mortgage rates tend to mirror the ten year note, both new mortgages and refinancing rates are presently near historic lows.  This bodes well for the prospective buyer pool and it could yield a spike in home sales in the short term.

 

Here’s one take on the Coronavirus situation: https://www.fool.com/millionacres/real-estate-market/articles/how-the-coronavirus-could-impact-the-american-real-estate-market/

 

And that’s what’s on my mind today….

Working with Carlos

Working with Carlos VI: http://youtu.be/amS58pRWd1U