We all find ourselves in an extraordinary time with the COVID-19 virus. During the past two weeks things have moved so quickly that it is hard to keep up with the daily reports about the virus and its effect on our health, our economy and our way of life.
Virtually overnight this virus has changed the way we live. Things are moving so fast that many people don’t know how this will affect the real estate market. The news is everywhere and because of that many people are overwhelmed with uncertainty and fear. We wanted to share some facts with you to assure you that the real estate market will weather this storm and there will be many more sunny days ahead for real estate. The virus will pass, the economy was strong before the virus and it will recover once it is over. There will be economic bumps and bruises, but they will heal, and the economy will thrive again.
The fundamentals of our real estate market are strong. Immediately prior to the virus outbreak our housing inventory was extremely tight and buyers were having to compete when making offers to buy. Our economy was thriving, unemployment was low and demand for housing was extremely high. Home prices had risen to record high levels and sellers were experiencing high appreciation rates on their homes.
Here we find ourselves wondering what is next for real estate and the economy. We have seen many events occur over the years that have affected our real estate market including the Great Recession of 2008/2009, the dot.com bubble bursting in the late 90’s and the horrific terrorist attack on our country on 9-11. The one thing all these events have in common is that they all weathered those events and real estate came back even stronger than before. We expect the same thing to happen with this “event”.
This is an unprecedented time where the Government shut down the economy by ordering businesses to shut down and for employees to stay away from work. With this type of action, it was only a matter of time before the Government provided some type of relief. The great news is that on March 24th the White House reached a deal with lawmakers on a robust stimulus package that is already calming the nerves on Wall Street. The two trillion-dollar package provides a wide array of economic relief to employees, businesses and citizens. The package includes $1200 payments to individual Americans and $500 for each child (depending on income), unemployment insurance benefits have been dramatically increased and extended while small and large businesses can now borrow money with grants and incentives to keep employees working. This is a massive stimulus relief package, so robust. In fact, it is the largest relief package ever agreed on in our country.
So please remember that real estate is an industry that is driven by supply and demand and our area does not have enough inventory to satisfy our demand which is what caused real estate prices to rise so substantially over the past few years. Real estate still is and will continue to be a strong stable investment. It is critical to look past the immediate “event” in the market and essential to focus long term. It is still an incredible time to both buy and sell real estate because buyers benefit from the incredibly low interest rates while sellers benefit from the low inventory and the high buyer interest. And while the market may be “on hold” while we all exercise caution and stay at home know that this is a temporary situation.
One thing is certain and that is that all “events” have a lifespan and all “events” pass. We are in a very difficult “event” right now as it affects the way we live our daily lives. This will pass and before long we will all be back to our regular routines and real estate will continue to thrive in our area.
Know that we are here to help navigate the real estate market for you and if you have any questions whatsoever please reach out and we will be here to answer them. Trust that real estate will continue to be an incredible investment that is strong enough to weather this current storm.