COVID-19 and Selling Your Home: Can your home value recover?
As our economy phases into COVID-19 recovery mode, suddenly people are asking questions like “What has COVID-19 done to my home value?” Fortunately, we’re here with some answers.
You may have seen our ongoing tips on real estate and COVID-19, but if you haven’t, you can catch up here:
Tip 1: Secrets of Home Buying in COVID-19
Tip 2: What you need to know about buying a home and your debt during COVID-19
Tip 3: Finding focus in a tumultuous economy
Tip 4: Won’t you be my neighbor?
Tip 5: Applying for a loan
Home value is based on what willing buyers in the market will pay for your home. As long as growing families need larger homes, retirement calls folks to explore new areas for rest and recreation, and distance working allows people to live wherever their dreams take them, there will always be a need for buying and selling homes. Ultimately, home value is all about supply and demand.
If the Ghost of Recession Past is looming over you, go ahead and exorcise him now.
It’s true that home prices tend to fall during economic recessions, but this isn’t a mortgage crisis like 2007. Rates have been cut and banks are still making home loans. Yes, large sectors of the economy have slowed or shut down, but they are coming back to life as pandemic regulations ease.
While we can’t make any guarantees, the economic effect of pandemics is usually V-shaped, with a sharp dip followed by a sharp recovery.
Zillow conducted a study on the impact of previous pandemics on housing markets. One intriguing finding is that home prices largely hold steady or suffer only minor declines. Want to know why? It’s because during a pandemic, there are fewer transactions. With less supply, demand goes up so home prices hold steadier.
Losses and gains vary by local market. In areas of high demand, property values may not dip at all.
In fact, Lake Tahoe is seeing a huge rise in demand as people discover that they can work remotely and live wherever they want to. And they’re willing to pay the price.
While we don’t have a lake and pine trees, our desert holds a mysterious and otherworldly beauty that captivates people and calls them back again and again. This puts the Coachella Valley in a great place for buoyant home values.
Jobs are coming back slowly but surely, while some sectors of employment have steadily worked from home without much disruption. Prospective buyers whose income hasn’t taken a hit may try to capitalize on the current opportunity of low mortgage rates by purchasing property now instead of waiting around for rates to rise.
Now, as always, If you find a home that seems right for you, you have job stability and you can get financing at historically low rates, buying a home can be a wise choice.
The government is using the Cares Act to support Americans by providing cash, deferring mortgage and other debt payments, and aiding businesses so they don’t have to lay off workers. This helps keep people in their homes. Sadly, it won’t be enough to save everyone who has lost income from the economic shutdown, but it does rescue the market from being flooded with homes for sale, and that holds up housing values.
The one thing we can guarantee is this: Get enough interested buyers when you decide to sell your home, and you’ll command a decent price for it. That’s what I’m here to do for you.
Still got questions? I’ve got answers just waiting for you!
Reach out, let me know your current concerns, and let me take the knots out of real estate for you.