The 2019 novel COVID-19 coronavirus pandemic has resulted in many economic effects that are being felt all around the world. The impact of the virus has affected virtually every industry in every market.
Unsurprisingly, one of the markets that have been hit the worst by the pandemic has been the real estate market. Simply put, the pandemic has had an unprecedentedly massive impact on housing prices.
In this article, we'll discuss how housing prices have changed and what you can expect to see in the home buying and selling market as we move forward.
People Aren't Buying
Before analyzing how home prices have changed in recent months, let's first look at how the virus impacts buyer behavior in the market. In a nutshell, the virus has resulted in far fewer home purchases.
Why is this the case?
Think about it — the virus has resulted in a lot of folks getting laid off. As a result, job security just doesn't exist right now. No financially savvy family wants to take on the responsibility of a mortgage when they no longer know for sure that they will be receiving a steady paycheck.
However, at the opposite end of the scale, think about what those who had their houses on the market are doing. They probably need the money from the sale of the house, whether it's so that they can finance the mortgage of the other home that they've moved into or for some other reason. Consequently, the houses are staying on sale.
So the demand has decreased while supply has stayed constant.
Housing Prices Are Going Way Down
The result of demand decreasing while supply stays constant is that housing prices have gone way down. In fact, home sales will continue to dip by as much as 15% in the wake of the pandemic. So there's a clear answer to your question of will housing prices go down or not.
The next question is when housing prices go down. The answer to this is a little less clear and will depend on individual countries' responses to the virus. If markets continue to remain shut, then job security won't come back for a while.
Housing prices will then continue to plummet.
But if the markets are reopened sooner rather than later, then job security comes back sooner and folks are ready to commit to a mortgage payment, increasing both demand and prices along with it.
All this to say that if you do have job security right now and can finance a mortgage, then there's no better time to purchase a home than when prices are at record lows. When you find the right place, use The Storage Box as a solution while you move!
COVID-19 and Real Estate
The effects of the pandemic are significant in the real estate market. However, like with all things, once coronavirus stabilizes, so will the housing prices. Prices will gradually return to normal — you can count on that.
Be sure to check out the rest of the website if you're interested in learning more about real estate!