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It’s safe to say that the world has changed dramatically in the last few weeks. So much so, that it’s hard to remember what life was like before the coronavirus.
Every industry has been impacted in some way by these events, and it’s impossible to guess what’s next.
Real estate is one of them. What’s the impact of COVID-19 on real estate and what does the future hold?
Keep reading to find out
1. Mixed Information for Real Estate Sales
In the real estate market overall, you’re seeing two definite trends. The first is that homebuyers that were planning on starting on searching for a new home in March decided to put those purchases off.
At the other end of the spectrum, you have families that were in the process of selling a home and now need a new home to move into. They can’t suddenly stop looking for a new home out of need.
2. Real Estate Agents Are Adapting
How can real estate agents hold open houses and do home showings for their clients? The virus has forced real estate agents to take their business online.
There’s been an increase in demand for 3D tours and digital tours. This allows homebuyers to get a good look at the home before they make a commitment.
3. What About Interest Rates?
One of the biggest impacts of coronavirus is economic, and it happened when the Federal Reserve dropped a bomb and moved interest rates to zero.
Even though the Fed has moved interest rates lower, banks haven’t dropped their interest rates, yet. That’s because home values may drop and there’s still a high demand for refinancing mortgages.
Once these markets get a little soft, then you can expect banks to lower their rates.
If you’re looking for dentist real estate, you may be better off buying a property rather than renting. You want to weigh your options and determine the best route for you.
4. Is the Worst Coming?
Unemployment soared in the last week to 3.28 million claims, which smashes the record of 695,000 set in 1982. Businesses have been forced to close their doors.
We’re also approaching the first of the month, which is when rents and mortgage payments are due. Businesses and families have a hard decision to make – whether they pay their mortgage or rent or not.
Some companies have already informed landlords that they won’t pay rent. Some are predicting a complete collapse of the mortgage system, though it’s too early to tell right now.
If there is a collapse in the mortgage industry, it could lead to depressed prices and massive drops in value. Many mortgages could wind up underwater as they did in 2008.
Coronavirus has turned our world upside down. While many of us work from home and try to stay inside as much as possible, markets are still moving.
The impact of COVID-19 on real estate can’t be understated. There are a lot of uncertainties in every industry. Hopefully, we can overcome these challenges so the market can rebound as soon as possible.
Come back to this site again for more real estate news and tips.