Real Estate Market Update
Our lives are changing day to day as we keep a close eye on how the current pandemic unfolds. While we are trying to get used to what we can and can’t do on a daily basis, we all begin to ask what things will be like once we arrive at the time when this all blows over. For a while now and long before the current issue at hand, there has been speculation about a possible recession with many fearing it could resemble that of 2008.
While it does not seem that it will be business as usual in the immediate future, home prices are not anticipated to drastically drop where low mortgage rates may help sustain some purchasing power for buyers. Many are being directly affected with temporary layoffs and pay cuts as we weather through this crisis, but as soon as normalcy returns we have to guess what will happen as the real estate market catches up to speed. Will the sales pace be slower? That is where historically low mortgage rates combined with the already limited inventory could help maintain market strength.
“I don’t know which force will be greater: the negative impact of job cuts, if that was to occur, or the positive influence of low mortgage rates,” says National Association of Realtors® Chief Economist Lawrence Yun.
Where this is a temporary situation, many sellers are going to likely be less apt to accept a sales price that is substancially less than just a few weeks ago. Again, where inventory is already at all time lows, demand may still be strong enough where buyers have less options. The only thing we may see vary is the rate at which different markets bounce back. Those that are less of a “staple” market such as ones dependent on tourism or even the luxury market may see a slower pace as we ramp up speed. Specialty markets often have a slower sales pace anyway so we may see a slight lag in those areas..
While there isn’t a crystal ball to predict how everything will unfold, there is historic data to compare from the last recession to suggest that any slowdown should not be nearly as drastic.
