The world is currently dealing with a pandemic stemming from the infectious Covid-19 disease. It is causing lockdowns and quarantines all over the world as governments try to reduce the spread of the virus.
While the impact of this infectious disease on our health and wellbeing is obviously the primary concern of the world, it isn’t the only one. There are concerns over healthcare, the economy and even real estate.
Whether they sell on their own or with the help of a website like ISoldMyHouse, millions of people sell their homes every year in the USA to interested buyers. Because of this, how the pandemic will affect the real estate market is a big deal for many people. Many are concerned and confused about what the future holds. This is both in terms of buying and selling.
Coronavirus Effect on Real Estate Market
With that in mind, this blog post is going to take a closer look at effect of coronavirus on real estate market in the USA.
Sinking Mortgage Rates in Real Estate Market
One major and obvious effect of Covid-19 on the real estate market has to do with interest rates. While it remains to be seen where rates will go as the pandemic continues, they are currently at historic lows. There are some who even believe they will go even lower. On the surface, this looks great for potential buyers.
They can lock in a mortgage at an incredibly cheap rate, potentially saving them thousands through the life of a mortgage. Of course, this isn’t the case if the mortgage you go with has a variable rate, as that will change. These low mortgage rates can also provide value for those individuals looking to refinance their mortgage.
We will Likely to See a Change in Real Estate Price
In all likelihood, the Covid-19 pandemic will lead to a change in real estate prices. However, the way that the prices may go is still up in the air. There are some who feel that it will lead to lower home prices, while others think that prices may actually go up. Those who think the prices of homes will drop believe that with less buyers on the market and more uncertainty, many sellers might get out in fear of their property value dropping lower.
On the other hand, the others think that these low rates will lead to an influx of new people interested in buying a home. Seeing this trend, homeowners might raise their prices due to all of the new competition in the market. If everyone tries to take advantage of a good deal, the deal likely won’t remain good for long.
Over time, we will likely see the American market go more strongly in one direction. But as of right now, many are left wondering whether the low rates will cause an increase in buyers and thus higher prices, or if sellers will be concerned about value drops or fewer buyers, and sell before things possibly get worse.
The Buying and Selling Process Will Likely Be Longer
The home buying and selling process can often be incredibly painstaking and long, but is a necessary evil. There are inspections, visits, negotiations, viewings and several other things that need to take place before a deal is closed. Now, with many people confined to their homes and not able to go anywhere due to the virus, this process could become even longer.
Before someone agrees to buy a home, they want to see it, speak with the previous owners and get an inspection done. This crisis the world is currently going through will greatly slow down the speed of any real estate transaction that is taking place, and might even stop several of them in their tracks.
Not only will the process be longer, but there will likely be less homes being sold during the pandemic. Many potential buyers will simply stay home instead of going out looking at homes, and many sellers might get cold feet selling in such a unique situation.
In conclusion, we hope that this article has been able to help show you coroanvirus effect on real estate in the USA. Of course, no one can know for sure, so only time will tell what impact or effect Covid-19 will have on real estate.
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