As one of the 3 essentials (🍕, 👕, & 🏡), real estate remains one of the most stable investments in any economic outlook. Unfortunately, some won’t let the truth get in the way of a good story. 😏 To see how real estate has fared in past pandemics, check out my video. 📲
Transcript:
Are we witnessing the early stages of a real estate apocalypse? In these uncertain times, it can be helpful to consider how past pandemics have impacted property values. Spoiler alert: it’s not that bad. I’m Eric with Eric Andersen Homes. Humanity and the real estate market are remarkably resilient. Zillow’s chief economist has recently looked at how the 2003 SARS outbreak, the 1918 Spanish Flu, and the novel coronavirus’ early spread in China have impacted their respective markets. Here’s what she found. The first thing to note is how economies tend to respond to epidemics. Economic activity usually drops sharply during outbreaks but picks up quickly once it’s over. There seems to be widespread consensus that the US bull market is over, though the jury’s still out over whether or not we’ll see a full-blown recession in 2020. Either way, this is NOT the beginning of the real estate apocalypse. More often than not, home values continue to increase during recessions. And when we look at the SARS outbreak in 2003, property values remained fairly stable. The biggest impact wasn’t on home prices, but the number of homes sold, with transaction volume falling 33-72%. Turning to more recent history, the early data shows that home values have not fallen during the first period of COVID-19 in China. While it’s still too early to say exactly how the virus may impact the housing market in the short term, we do know that the housing market isn’t causing the concern like it did in 2008. People are going to continue to buy and sell homes. People have always preferred living indoors to the wilderness, and that’s not going to change. The reasons we move, things like, birth, job changes, and retirement, will continue to happen. Estates of departed loved ones will continue to be sold and bought. Everyone needs somewhere to live, which is why real estate has always been and will continue to be a solid, long-term investment. I’m Eric with Eric Andersen Homes, and I’m here to provide you with a smarter approach to real estate.