A new decade, a New Year. Most of us were very optimistic as we headed into the New Year and were blind sighted by what is currently happening. “Is this really happening?” most of us say to ourselves throughout the day.
Yes, it is happening and here is what you need to know.
According to DMAR ” real estate has been classified as a “critical business” under Colorado’s stay-at-home order and, as such, REALTOR® and Industry Partner members can continue offering services to clients as long as they comply with social distancing requirements and safety guidelines mandated by local and state officials. However, in an effort to help prevent the spread of COVID-19 DMAR is recommending members stay at home and only work with buyers or sellers who truly need to complete a transaction right now. “Currently, Real Estate Broker and Associates are not to hold any open houses unless they are done so virtually.
How does this impact Real Estate? It generally puts everything on pause. Zillow conducted a study on housing during previous pandemics and concluded that while home sales dropped dramatically during an outbreak, home prices stayed about the same or suffered a slight decrease. This makes intuitive sense because it’s harder for prices to change when there are few transactions. In short, previous pandemics have simply put the housing market on pause according to The Curb. However, with unemployment sky rocketing, supply chain issues and uncertainty the web site traffic to real estate websites are down 40%. The market is uncertain.
The mortgage lenders will play a huge role in the uncertainty of the market.
“Any prolonged mortgage payment suspension could cause chaos in the mortgage industry and lead to a liquidity crunch, where lenders don’t have the capital to lend to potential homebuyers. Subprime and speciality mortgages, referred to as non-QM, have already vanished for the market, which would make it harder for people with less than perfect credit to qualify.”
“But if the damage to the mortgage industry’s lending infrastructure is limited, it’s possible a quick recovery would bring the housing market right back where it was prior to the pandemic.”
We can only speculate how Coronavirus will impact the Real Estate Market. The market will be put on pause and only time and the virus will tell us what happens next. Hold on for the ride.
Lindsey Wolters
*Information from The Curb.
https://www.curbed.com/2020/3/6/21163523/coronavirus-economic-impact-housing-market
