By now we’ve seen it all over the news and have seen the empty hand sanitizer shelves in stores. Coronavirus is on the forefront of everyone’s mind, but what does it mean for the housing market specifically? We spoke with our Wells Fargo Private Investment Officer and he gave us some tips and expected trends for the real estate market and economy. We are in no way a health or financial expert but wanted to pass along his comforting information.
Overall the illness isn’t the problem, the problem is the cure. Without a vaccine, the cure is basically to avoid social contact. And the economy is a social science ⅔ driven by individual spending. The coronavirus will certainly change some aspects of current lifestyles and human patterns. Examples include avoiding cruises, shaking hands as a greeting, and the idea of a choice of change (maybe I want to go) vs mandatory change. This will affect the overall economy, but a recession is not expected. A recession is defined as the fall in GDP for two consecutive quarters. We had an amazing first quarter with strong numbers. The second is expected to slow down, but the third should be back to positive again.
Where are we now in the stages of the impact of coronavirus? We are in the first stage of “panic.” This is not saying that panicking is the answer. You’ll see people buying products in bulk (especially those hand sanitizers and cleaning products), preparing to hunker down for a few weeks at a time. When Americans get upset or panic, they tend to drink or shop. During this time of panic please remember to shop local! If you are planning to spend, spend in your own community where 68 cents of every dollar you spend stays in your community.
The next stage is “reality.” This involves the “new rules” that we personally make for ourselves. We might not want to go to crowded restaurants, we might not want to fly or travel. Companies might implement hiring freezes and try to cut costs to prepare for a slow quarter. The long-term travel industry might change, and telecommuting could become more commonplace. The government can also step in with a fiscal stimulus and ensuring interest rates stay low.
What does this mean for the overall housing market? People will continue to buy homes, even if it slows down for this quarter, those who want to buy will buy. The “fear” of going out may actually benefit the buyers willing to remain active in their home search, as competition will likely be down. People for the time being might delay selling their home. The key word here is “delay.” And we are defining delay by two to three months at tops. Knowing this we expect Q3 and Q4 to be stronger markets than initially predicted.
Buyers will have more time on their hands and in front of a tablet/computer/phone and thus viewing content will increase. Because of this, sellers need to take advantage of digital marketing, especially video and eye-catching photography, for their listings. Sotheby’s values the need for this type of elevated content and is actually one of the topmost-watched luxury real estate digital content.
Working from home? This can also be a great time for sellers to start the decluttering process or do the little home improvement projects you’ve been putting off! It’s also a great time to refinance – get all that paperwork together and save yourself some money. Interest rates are the lowest they have ever been, so take advantage! Reach out to us here at The Patterson Group and we can provide a checklist for first steps.
The Patterson Group is one of the most experienced and trusted real estate teams in the area, serving Alexandria, VA for over thirty years. We offer professional, hardworking, detailed and friendly service and a large network of contacts and resources accrued over our many years in Alexandria real estate. Comprised of seven Alexandria locals, six of whom are licensed realtors and three of whom are accredited staging professionals, The Patterson Group is passionate and knowledgeable about Alexandria, VA and here for all of your Northern VA real estate needs. Allow us to help you find your home here and discover all that the Alexandria lifestyle has to offer.
400 South Washington Street
Alexandria, VA 22314