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How will COVID-19 affect real estate?

As the world nervously watches the spread of COVID-19 (Coronavirus), the pandemic has begun prompting responses from every industry, and nearly every level of organization in the country. Perhaps a much anticipated social gathering or recreational league you or a family member enjoy has just been canceled or postponed indefinitely. Professional sporting events, concerts, and even political campaigning have been impacted. How then, has COVID-19 affected the real estate market, especially as we enter what was primed to be an especially hot spring?

Lawrence Yu, chief economist for the National Association of Realtors, had anticipated about 5.5 million sales of previously owned homes this year (an increase from 2019 and 2018).

That’s because borrowing costs have plunged to lows never before seen (e.g., an average interest rate of 3.29% on a 30-year fixed-rate mortgage) and the job market is strong. Obviously, though, no one could have foreseen a virus disrupting market conditions at the start of 2020.

As you may have read by now, the Federal Reserve made a move on Sunday to cut interest rates to zero. While this move is not a cut to mortgage interest rates, it will likely have an impact on those rates as well. How quickly we will see this potential drop in rates and for how long is still unknown. Last week the market remained very volatile and has started in the same way this week as well. Nonetheless, we expect it to stabilize in the coming days and hope to see those lower mortgage interest rates. So, what does this mean from a consumer standpoint? There has never been a better time to buy a home or refinance the one you’re currently in! Affordability will continue to work in the consumer’s favor with the lower interest rates. We work directly with Josh Martinez, a lender at Legacy Mutual Mortgage who is very experienced and would be happy to go over the different opportunities when buying a home or refinancing it. We have also set it up where he can take these calls over the phone or would be happy to do a Skype/Facetime/Zoom call!

In the hardest-hit counties in the nation, such as King County, Washington, Realtors are reporting that homes are still being bought and sold like normal. Though there has been the occasional seller canceling an open house here in San Antonio, the fact remains that properties are still moving; buyers and sellers understand this market has something to offer for everyone.

Yes, experts are tampering their expectations for the spring market slightly. The most significant impact is the fact that sellers may be less likely to list their homes right now, which could dampen hopes that significantly more inventory would hit the market come spring and alleviate the supply stress. Conditions that make for a fantastic market for both buyers and sellers still exist—crazy low rates and rising home values. 

Ultimately, you have to determine what’s right for you as a homebuyer or home seller. Our job isn’t to push you into a decision you’re not comfortable with, but rather to provide hyperlocal context that may be lost in the national media coverage. The market is still thriving, especially here in San Antonio and the surrounding areas. 

Of course, the degree and nature of the COVID-19 outbreak may change, and that’s why we will continue to provide you with the most up-to-date information possible. The simple fact is that we are a Real Estate Team, not epidemiologists.

It’s important that we listen to the medical professionals who are bearing the brunt of this, working hard to treat the infected, and developing a vaccine. We must all do our part to slow the progression. Hopefully, by now, you’ve heard these protocols, but it never hurts to reiterate them:

– Wash your hands with soap for at least 20 seconds, especially after having been in a public space or after coughing, sneezing, or blowing your nose

– If COVID-19 is active in your area, put distance between yourself and other people. Avoid public areas unless absolutely necessary, especially if you are at a higher risk of getting sick.

– Stay at home if you’re sick.

– Wear a mask if you’re sick.

So what can you do if you have your good hygiene habits down but still aren’t sure if it’s right to begin the home selling or home buying process?

If you’re practicing social distancing, I’d be happy to offer you a virtual consultation. There’s no need to meet in person. We can discuss your specific needs in detail, and I can also provide you with a virtual tour of homes you may be interested in.

If you have any real estate-related questions or you want more specific stats on how our market is performing, please reach out to us anytime. For COVID-19-related questions, routinely check the Centers for Disease Control website or contact medical professionals.

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