Buying and Selling During COVID-19
As a top-producing local real estate team, we’re committed to giving you excellent personalized service. This guide offers a timely analysis of the housing-market for Saratoga that will help you strengthen your negotiating position as a buyer or seller, develop a winning buying or selling strategy and answer questions you might have during this time.
At the time of writing this guide, we are navigating through an unprecedented response to COVID-19. The situation is impacting the real estate market in two key ways. On one hand, interest rates will likely remain historically low for the foreseeable future. This encourages potential home buyers to take advantage of low interest financing, makes investments in real estate safer than other assets like stocks, and offsets some of the negative impacts to housing demand associated with the global pandemic.
On the other hand, housing demand is being challenged; the stock market losses impact buyer wealth (especially for the luxury market), virtual showings in response to social distancing may limit buyer interest, and economic uncertainty generally has a cooling effect on the market.
Housing Market Behavior during Economic Upheaval
The most recent case of widespread economic disruption, aside from COVID-19, is the 2008 global financial crisis. It was the most serious financial crisis since the Great Depression, and it was long. It had a profound impact on the country’s housing market, which began its recovery in January 2012 – almost 6 years after national housing peaked in July 2006.
Unlike the 2008 global financial crisis, the current economic downturn stems from a virus rather than huge systematic market risks. COVID-19 has shown our economic fragility with regard to businesses that require customers to leave their residences, but it hasn’t wiped out nearly the amount of wealth that was erased in 2008. Spending habits will adapt, but there is money to spend. Once COVID-19 runs its course, markets will revert to normalcy. In the short-term, residential real estate could see a dip because real estate and stocks are positively correlated. However long-term, real estate tends to be less volatile and a safer source of return.
What does this all mean?
We want to assure you that of all investments you can make, real estate has historically proven to be the best asset you can own in the long-term – and we expect this to continue to be the case.
In unprecedented times like these, it’s important to band together and support one another. Our team is committed to serving all your real estate needs while incorporating safety protocols to protect your loved ones. As we all navigate this together, please don’t hesitate to reach out to us with any questions or concerns.
We’re here to support you.