The rise of the Coronavirus is taking a jab at the housing market.
From California to New York, investors and homeowners are scrambling for new ways to keep the housing market at ease. Economically, the likelihood of a recession looms due to the Coronavirus outbreak.
There is a lot of uncertainty regarding how the housing market will be affected. Luckily for investors, homeowners and buyers, the real estate markets are taking on new strides to ease the blow.
With the threat of a global pandemic, the real estate industry has to get creative with options.
Here is how the Coronavirus is impacting the real estate market:
Different Regions, Different Impacts
Different regions are affected by specific industries that can alter their economic landscape. The long term and short term effects for this can vary by region.
For example, Florida is taking a hit within its tourism industry. Due to a steep decline in travel and the closure of non-essential businesses. Texas, a region known for oil production, is taking a hit within that industry due to the low price of oil.
Across the country, social distancing practice is affecting restaurants and bars, sporting events, and hotels. This practice can assist in the halt of the outbreak. The housing industry will rely on the containment of the Coronavirus so that the economy can stabilize again.
Even if the economy becomes unstable, it will take a lot to trickle down into the housing market. Regionally, the more-dense the population is, the more likely it will be that the local economy will take a while to bounce back.
Depending on where you are, the effects can differ. It's always best to keep an eye out and stay informed regarding your location and its precautions.
The Rise in Virtual Tours and Web Marketing
Virtual tours are beneficial to the buyer since they can look at as many different homes in one day as they want without having to leave home.
Also with the social distancing mandate, it allows buyers to safely view homes in detail. They can see floor plans, go into different rooms, and envision the space as if they were there.
Real estate marketers are looking to this as an up-and-coming way to engage buyers in the tour process. Coincidentally, this is a timely way to stay safe without compromising on your real estate needs.
In addition to virtual tours, various web marketing strategies are taking effect. Real estate marketers are using tools like lifestyle videos to illustrate a day in the life of a particular home.
Not only do virtual tours and web marketing make it helpful for buyers to see homes conveniently, but it may also be the standard way to view homes during this pandemic.
Coronavirus Induced Recession: Will the Housing Market Take a Hit?
Housing is an essential part of life. With the uncertainty of the economy due to the Coronavirus, the housing market is being analyzed.
Fortunately, even if the housing market does take a hit, it most likely won't be a disastrous one. When economies crash, the income of individuals takes a hit. Job layoffs, salary cuts, and closures of businesses can all affect income.
That is a large concern for individuals.
However, people need a place to live in. People seem wary of the housing industry due to the 2008 recession. However, that particular recession was a unique one. It was mostly caused by the chaos within the housing market.
The 2008 recession was fueled by a foreclosure crisis and an overall drop in the housing market.
Though that crash has left a bad taste in people's mouths, some say it's premature to access whether or not the housing market will be affected. Commercial real estate is a slower pace than the stock market.
The Coronavirus has affected the first part of 2020, but if the outbreak flat-lines, the latter half of 2020 will make a strong comeback.
The Scoop on Interest Rates
Mortgage interest rates are being analyzed, as they fluctuate based on the economy. At this time, investors are looking into bond markets. This creates more accessible debt and refinancing options.
This helps with affordability and gives the buyer a good idea of when they can buy. However, due to the surge in unemployment, it can make lenders wary of whether or not to qualify buyers.
Across the board, there is a lot that is uncertain about how this virus will continue to affect interest rates and the benchmarks for qualifying.
Day by day, things can change. It can get worse before it gets better. It's beneficial for buyers to analyze projections and see what is best for their real estate needs.
The Uncertainty in Construction
Due to the pressure to stay at home, the construction industry is taking case-by-case action.
Many states have closed all non-essential businesses, but construction is a gray-area. While some projects allow for distance, others require close contact with fellow workers.
Depending on the situation, this can affect how fast projects are getting completed. Overall, real estate is still seen as an essential business. Due to the nationwide housing supply shortage, construction on new units is being permitted during this time.
Construction employs over seven million people in the United States. Depending on the region, it will be business as usual. However, if the outbreak continues to spread, it can alter the plans of construction companies.
Additionally, due to the uncertainty of the economy, the construction of new-homes can expect a drop. This is because some buyers are wary at this time, and may not want to move forward with plans for new construction.
As the Coronavirus continues to develop and affect some areas more than others, we will see a better picture of how construction will be effected in this pandemic. It not only effects real estate but a wide variety of industries.
The Perfect Storm
The Coronavirus has taken swings at a multitude of industries. As far as economic stabilization, this pandemic has shaken the markets and people alike.
The real estate market is in a perfect storm. Due to its dependence on open-houses, employment, and people being eager to buy, this storm causes new actions the real estate market has to take to ease the blow.
However, there is still so much uncertainty. Most projections show that the housing market will not be as greatly affected as it was in 2008. The drop in interest rates are attractive to new buyers, and the continuation of construction is beneficial to the supply of homes for individuals.
Additionally, the evolution of virtual home tours and online-based real estate communication has made it simpler for buyers to find a home. Even if there wasn't a global pandemic, some buyers would much prefer a digital approach to home buying versus a traditional one.
This eases the spread of the virus and allows for convenience. Virtual home tours are a new way to keep people engaged in real estate at this time.
While the Coronavirus continues to rear its ugly head, it's important to see that by the end of the year it can subside. Though the economic effects may sting for a while, the housing market can easily have a bounce-back.
The first half of 2020 has been greatly impacted, but the latter half may be able to move forward.
Whether you're a buyer, owner or investor, right now is a time to watch and see. Developments change constantly, and some regions have already shown signs of flattening the curve.
If you are in an area that has not been heavily impacted, still have a steady income source, and can find a good interest-rate now may be the time to look at buying. If you are in an area that has been greatly impacted and have more uncertainties, you can always wait and see.
No matter what camp you're in, it's always important to stay informed. The perfect storm may end soon, and there can be a benefit in looking at different options if you are a prospective buyer.
If you are looking for more information regarding real estate trends, want to take a peek at some virtual 3D tours, or just want to know some tricks on how to be a good homeowner, check out our blog for the latest trends in the real estate industry.