The coronavirus pandemic continues to impact the real estate industry. Everything, from brokerage operations to how listings are being marketed and the ability to close transactions, is requiring realtors to adapt to these extraordinary circumstances.
With pent up demand, low inventory, historically low interest rates and Banks working hard to keep all these mortgage products available and competitive, there is a lot of reason to feel very optimistic about the housing market. Yes, COVID-19 has and will continue to affect the real estate market. But it will affect things a LOT differently than what happened during the Great Recession of 2008.
The Great Recession was a Home Loan Crisis that affected the Housing Industry, causing a massive financial meltdown and changed the mortgage, home buying process forever. But since that time, more than 60% of homeowners now have more than 60% equity in their homes and almost half of homes in the USA are owned free and clear. This is GREAT NEWS! Plus, with housing in the USA representing a massive 17% of GDP, the Fed and the Banks are working hard to keep the housing market alive and kicking.
In many ways, this is an EVENT based crash and not an economic crash. More akin to the great period of turmoil that followed 9/11, what is happening today has generated fear, anxiety and uncertainty and the same parts of the economy that were affected then are massively impacted now - Airlines, Leisure, Restaurants, Retail, Entertainment; The discretionary consumer services in general.
But where you live and call home is not discretionary. And, in many ways, the importance of having a safe, comfortable home where you can be around your loved ones IS the most important thing on everyone's mind right now. This is why we, in the Real Estate industry, are feeling very optimistic about the Housing Industry in the weeks and months ahead.
Of course, there are big challenges - not least the logistical process of ensuring that people Buy and Sell homes with health and safety top of mind. But this is where a tech enabled agent of the future can help. And this is why it's more important than ever to work with someone you trust and who can be your trusted Real Estate Resource, Knowledge Broker and Local Area Economist. Who you work with matters!!
So, just remember - this is not 2008 and better days are ahead!
In an effort to help you unplug for the weekend, I have gathered a list of real estate headlines and updates impacted by the coronavirus. Instead of you spending your precious vacation time staying in the know, I’m giving it all to you in one place:
The ultra-rich are still buying $50-million homes (in case you were wondering)
In 2019, L.A. County recorded 85 residential sales of $5 million or more in March and April combined, according to the Multiple Listing Service. During the same period this year, the county saw 82 home sales of $5 million or more, including 14 transactions north of $10 million. With interest rates hitting historic lows, buyers with plenty of cash on hand are still hunting for deals.
Real estate resilient during COVID-19 but CMHC warns about debt’s effect
Home prices are holding up during the coronavirus pandemic despite lockdowns.
The most recent sign of resiliency comes from the Teranet-National Bank House Price Index for April, a composite of 11 major markets, is up 5.3 per cent from a year earlier. But for the upcoming months, a significant increase in unemployment rates and the inability for many consumers to meet the criteria to qualify for mortgage loans could put downward pressure on house prices
Rising demand in Tahoe region real estate out of COVID-19 shutdown
Why is there so much interest during the stay-at-home order? People from major cities are seeing how much easier it is to work remotely and they’d rather be in the mountains than in a highly dense area when a national health crisis happens.
How will coronavirus affect commercial real estate values?
Pre-COVID found yield requirements in the 4.5-5% range. Now it’s anybody’s guess. For an investor value depends on the capitalized net income of rents. An occupant? The price of utility with which an occupant’s operation relies.
The Lessons Real Estate Leaders Have Learned From The Coronavirus Pandemic
Businesses across the country, in a wide array of industries, were faced with monumental challenges from the novel coronavirus pandemic. Here are lessons learned.
COVID-19 Tax Issues for the Real Estate Industry
The economic slowdown caused by the coronavirus (COVID-19) outbreak has significant effects on the real estate sector. The federal government has implemented stimulus measures most notably, the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) to combat the economic impact of the COVID-19 pandemic on businesses, individuals and families. In addition to loan programs, mortgage relief and other measures that may benefit real estate businesses and investors.
This article provides a summary of the key CARES Act and other federal tax provisions that real estate businesses and consumers should consider as they navigate through this crisis.