The real estate market is all about supply and demand. During times of economic downturns, it may seem like the first thing to take a dive would be the housing market. However, history has something else to say about that. While there have been specific crises involving the housing market, in other historical economic events the real estate market fared well and recovered quickly. Here’s what experts are saying about the impact of COVID-19 on housing.
In April of 2019, researchers at First American Financial Services drew attention to the difference between causation and correlation and how they are used to predict the changes in the housing market. Their final verdict being that the next recession is not likely to cause a negative change in housing, due to the fact that each change in the market is caused by something different.
In another publication by First American, chief economist Mark Fleming predicts that the housing market will be one of the least impacted sectors in the economy. While it will not go completely untouched, it is not going to take the largest hit.
MarketWatch reminds buyers and sellers alike that local markets diverge from the national trends and to be aware of the changes in specific cities.
Learning From History
The past has a way of teaching us how events in time domino from one another. Economists look back in history to analyze how different industries will react to mass-scale events, like a pandemic. First American predicts that, due to the state of the housing market before COVID-19, it is likely to stay steady because of three key factors: the market was not overvalued, equity is high, and the demand is still strong.
ATTOM Data Solutions analyzes data from housing over time, through many economic changes. Their analysis found that in many economic crises, the prices of homes continued on a positive trend. This pattern has proven to be true for the first quarter of 2020.
Building a Brighter Future
How can consumers use housing market trends to inform their own decision-making about selling and buying? It starts with what you need. In economic downturns, many people may be feeling the effects of a job loss or an income reduction, and it’s important to live within your means. If downsizing your home will make financial commitments easier and free up cash from your equity, don’t be afraid to explore the possibility of selling. If you’re buying, it’s a good idea to understand your budget and payments before, but you shouldn’t be scared of buying during this time.
Not sure if you’re ready to make a change? Use our infographic below as a guide.
Turn to a Trusted Local Source
A knowledgeable expert is your best friend if you’re considering the sale or purchase of a home. In the traditional world of real estate, agents make commissions on every home they help buy or sell. It’s important to weigh that information against your quest for accurate information. Here at Homie, our agents don’t charge a percentage-based commission. That means that they aren’t chasing the next transaction to bring home their paycheck. The outcome? Local, dedicated agents who have your best interest in mind, no matter the market.