As the coronavirus (COVID-19) outbreak wreaks havoc across the global economy, there is little to take away as a silver lining. But even as market activity takes a downturn, the coronavirus real estate effects are emerging to be quite beneficial for buyers.
This may sound like a strange take to have on a global pandemic, but evolving trends point out that we are living through favorable conditions for homebuyers and investors alike. It may not be what you would like to hear if you are planning to sell your property. However, it is certainly something you may want to pay attention to if you are looking to acquire real estate for long term benefits.
There Are Quite a Few Factors at Play
According to reports, the trends triggered by COVID-19 are paving the way for market conditions that are favorable to homebuyers and investors.
At the time of writing, most states are following shelter-at-place orders, which also limit real estate operations. The absence of open houses and the increase of virtual showings have made it challenging for realtors to showcase their offerings in an optimal manner. Whereas, the absence of lucrative offers is causing sellers to back away from their listings, triggering a shortage of inventory and keeping the prices stable for the most part.
But that’s where the larger coronavirus real estate effects come in.
Deals Are Aplenty, You Just Need to Look For Them
With the mortgage rates shaved off to an all time low as of last month, select buyers are hopeful to find deals in select areas. While the overall market remains strong, a significant drop in real estate prices is expected in overhyped regions such as South Florida.
In these markets, buyers are not only putting lowball offers, but sellers who want to close on their listing are also accepting them wholeheartedly. The reason is simple. Current owners want to offload their inventory before it meets a price cut.
While this creates a risk for buyers purchasing these properties, a quick look at history tells us that this will not be an everlasting story.
Recession Does Not Always Mean a Halt to the Housing Market
While our last memory of an economic slowdown is of the Great Recession from 2008, the period’s massive effects on the housing market are not directly related to a typical recession. In fact, the economic downturns before the Great Recession still saw relatively stable prices throughout their recorded periods of slower activity.
It’s because the Great Recession was triggered by the burst of a housing bubble. But not all recessionary periods are caused by the housing market activity. It especially holds true for the current economic downturn via COVID-19, which is something completely unprecedented.
With this in mind, it is safe to say at this point that even as sellers pull out of the market, prices fall a little bit, and inventory gets tight, the coronavirus real estate effects would not stay in place for long. With continuous activity, the prices are likely to restore in hyped markets within the next few months.
This means that if you have been trying to buy a property especially in a competitive region, this would be the perfect time to act on your plan.
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