What the CoViD-19 Pandemic Means for the Housing Market
Ever since it was first detected in Hubei, China, the 2019 novel coronavirus (known officially as SARS-CoV-2 or nCoV-2019), has caused a pandemic that has put economic activity to a standstill. Highly contagious and enigmatic, the virus causes a fatal disease known as CoViD-19 which mostly affects those with compromised immune systems such as the elderly and the sick.
As the United States races against time in an effort to contain the virus, citizens are advised to stay at home, avoid large crowds, and sanitize their hands.
Indeed, the next few weeks would be challenging for the real estate market which has to deal with buyers and sellers paralyzed by caution over the virus.
“Fears of the coronavirus have some sellers pulling back and some buyers taking their searches entirely online,” writes CNBC’s Diana Olick.
Stocks came tumbling down days after the first cases in the United States were reported. To ease the impact on the economy, the Fed has reportedly cut the interest rate down to zero, a move described by some experts as “historic” with many expecting the real estate market to enter uncertain territory.
But should everyone be worried considering that it’s supposed to be a spring market?
According to Olick, mortgage rates have fallen to 3.13%. While it went back a few notches up at 3.65%, the in effect slowing down home purchase loans to 6% last week.
This comes as citizens are self-isolating themselves and securing their financial futures, thereby putting a strain on the demand for large mortgages.
It is also important to look at potential job losses as companies explore other downsizing measures to cope with the downturn that is happening.
However, in a Builder Online article by Meyers Research’s Director of Economic Research Ali Wolf, the disruption will not be as serious compared to a full-on financial crisis.
The CoViD-19 pandemic is described as an exogenous shock which puts a mild pressure on the economy — only if it does not last long.
So far, the Federal government has been keen on containing the virus and providing stimulus packages and other measures to cushion the blow.
In the real estate market, buyers would hold off their decisions or take advantage of sub-4.0% mortgage rates, according to Wolf.
The CoViD-19 situation will also not hamper home selling. With enough caution, sellers can still close deals in an environment where stepping outside is not a good idea right now.
For Frederick Peters, CEO of Warburg Realty, sellers can still make adjustments by leveraging listing platforms that appeal to buyers who have no choice but to do their home shopping at home.
“With detailed descriptions, photos, video tours, and floorplans, a buyer can learn a great deal about a property from the comfort of their living room,” says Peters in an article for Forbes.
But the biggest opportunity to home sellers would be the downtrend of mortgage rates. This has triggered a flood of mortgage refinance applications reaching an unprecedented 79%, prompting lenders to augment their staff in order to keep up with the sudden rise in demand.
As we can see, the CoViD-19 pandemic won’t put too much pressure on real estate activities. But however optimistic the numbers are, buyers, sellers, agents, brokers, and everyone else involved in the sector should not overlook necessary precautions.
A safer market for all
As per the guidelines issued by the Center for Disease Control, large gatherings should be avoided. In this sense, family reunions should be postponed until authorities give the “all-clear”.
For now, social distancing should be observed. Small gatherings are allowed so long as everyone is able to sanitize their hands and keep a distance of at least three feet from each other.
Homes should also undergo regular sanitizing using the right cleaning products. Focus on cleaning high-contact surfaces such as handrails, doorknobs, countertops, handles, light switches and tables using microfiber cloths and EPA-approved disinfecting agents.
It is also important to practice proper handwashing. The World Health Organization recommends washing with soap for 20 seconds and as frequently as possible. Be sure to get between the fingers and wipe each fingernail clean.
With extra precautions in place, you can still make the most of the situation to build your dreams, something that we at Arbrook Realty are always eager to help you with.
Abrook Realty’s CoViD-19 Toolkit
As your trusted DFW-based real estate partner, Arbrook Realty abides by official recommendations on CoVid-19 prevention. We make sure to help you with accomplishing your goals while taking into account the risks posed by the pandemic.
For this, we have implemented the necessary precautions to ensure your safety.
While we have several activities in store this month, we have decided to postpone our meetings and workshops. We are also looking into video conferencing so no one gets left out on essential insights.
We have also limited in-car touring in line with the need for buyers to stay home.
This is where our virtual touring comes in. We use high-quality videos to give our clients a good view of their ideal properties at their most convenient time and without exposing them to any risks. Also, in place of Open Houses, we are maximizing our use of social media and the MLS to keep our sellers’ listings active.
We intend to provide quality services as long as we can while we do our part in spreading awareness and official information within the community, especially when it comes to promoting HR 6201 to support those who are the most vulnerable.
We have also taken it upon ourselves to let people know that they can use hardship forbearance if they could not make any mortgage payments for now.
Finally, we are also taking good care of our staff members by providing them with enough sanitizers and face masks. We are also keeping up with the latest advisories coming from the government and international agencies.
It may take some time before things get back to normal, but for the meantime, cooperation and vigilance are still important despite the precarity of the situation. We are always thinking ahead as we believe that there should be nothing to get in the way towards your goals.
Give us a call today so we can help you reach them!