The real estate market in the U.S. has stayed predominantly resilient amid the coronavirus outbreak, but regionally some parts of the U.S. have taken more of a hit than others. Areas such as New York and Colorado have reported a changing local real estate landscape that will continue to be volatile over the next few months. Colorado reported that home values dropped 1 percent in April, and listings and showings have also declined. New York, real estate agents, have said that offers are coming in far lower than the asking price on high-end properties and that sellers are slashing prices in an attempt to sell properties. 

It’s still too early to tell what the full impact of the pandemic will have on the real estate industry, but predictions are optimistic and forecast a healthy market correction that has already begun. 

Is Now the Time to Buy, Sell, or Both? 

Despite the volatility, it is very much a sellers market, and buyer demand remains high. On the other hand, particular market conditions create an ideal scenario for some buyers looking for specific properties in certain markets. 

Experts are urging sellers not to panic and wait to cut property prices. As states begin to reopen, mortgage applications are still continuing to pour in, and those who are considering selling their homes should list them as soon as possible. 

Inventory in more rural areas has become more competitive as buyers are looking to move out of cities and invest in spaces with home offices and backyards to prepare for a new reality of increased social distancing measures and even a potential resurgence of COVID-19. 

Buyers looking for a condo may be able to take advantage of unique deals since housing demand is moving towards single-family homes. Buyers should research local markets extensively and gauge the temperature of both pricing and inventory for the type of property that they’re seeking. 

30-year fixed mortgage rates and 15-year fixed mortgage rates have hit a new all-time low since it dropped to 3.31% in 2012. Now is the ideal time for buyers that want to take advantage of a low mortgage rate.  

Are Virtual Tours Here to Stay? 

Until the coronavirus is fully contained, there will be more virtual tours being offered for people who are browsing for properties. Many states have categorized real estate as an essential service, which means that showings are able to continue if distancing guidelines are met. Regardless, there will continue to be an increase in virtual tours because the market demand is currently high, and buyers are putting offers on homes without doing an in-person visit in many cases. Real estate agents are now conducting as many areas of the home buying process virtually to protect themselves, home buyers, and sellers in some cases. New restrictions that limit showings to pre-qualified buyers, and even health screenings, are two possible procedures that sellers and realtors can consider to take extra safety precautions. 

How does a recession impact homeownership?  

Current reports of a potential recession have spooked the real estate community, but the reality is that those who can buy now should. Understanding how a recession impacts the housing market and pros versus cons in buying during a downturn can help to provide more clarity. 

A recession is a signal of severely stunted economic growth. This typically impacts the housing market because the demand for housing falls, and prices tend to drop. The circumstances that led to the 2008 recession were monumentally different in nature, and were due to loose underwriting standards and other risky products such as balloon payment mortgages. Although the severity of the unemployment rate is currently a real risk, experts predict that it’s not likely that an exact repeat of 2008 will happen due to the pandemic. 

Housing prices also drop during a recession, which are excellent conditions for homebuyers that have the budget to move forward with a real estate purchase. Buyers can also access low mortgage rates, and gain more leverage to negotiate fees during a recession. One con in this scenario would be that during a recession period, banks may implement other protections to ensure they are lending to qualified individuals, and buyers may be required to put more money down on properties. 

What does the future look like?

As for the rest of 2020, economists have compiled a broad outlook for the rest of this year for a variety of industries, and a highly turbulent world market. The housing industry is currently steady and looks to be holding strong. The 2020 elections are the next obstacle that the housing market will face. Presidential elections have always impacted the housing market more due to panic versus actual economic disruptors. Expected behaviors based on 13 previous presidential elections have observed a drop in home sales from October to November, which tend to recuperate in December.