You can’t deny it, our ambitions and plans for the 2020 Spring housing market were exceptional until the commonly known Coronavirus emerged. COVID-19 came and conquered with no relent, changing every part of that story.

coronavirus and real estate and spring housing market 2020

A commonly searched question since the outbreak of the notorious virus has been: How will the spring housing market be impacted? Few homes look their best in the dirty grays of late winter, which is in part, one of the reasons why the home buying season coincides with the arrival of spring. 

Commonly, real estate agents and analysts alike say the effects of the Coronavirus on the housing market are yet to be fully observed. The data from January pointed to a strong market, but things aren’t the same based on recent statistics. Experts say the long awaiting spring seasons hold some changes that we still need to see.

The Spring Housing Market Might Experience A 35% Fall

As Americans sit back watching the fall of their retirement funds, there’s no doubt the spring housing market will experience the same correlational fall as well. Home sales could experience a 35% fall annually this spring, compared to the last quarter of 2019, as seen by a study by Capital Economics. This could bring the total home sale to about 4 million annualized, with the lowest since the start of 1991.

The First Impact That Can Be Seen Is The Reaction Of Sellers

wash your hands to prevent the spread of COVID19

Some sellers are taking their home off the market, while others are canceling open houses to avoid further contact with future infected home shoppers. However, record-low mortgage rates are luring home shoppers to the market.

According to a recent survey conducted by the National Association of Realtors, almost 1 out of 4 home sellers nationwide are changing how their home can be shown to potential buyers, due to the coronavirus outbreak. In worst cases, sellers are halting open houses, others are requiring potential buyers to wash their hands or use hand sanitizer, or go as far as requesting buyers to remove their shoes. 

A few real estate agents canceled their scheduled open houses last weekend, and now, a majority of agents are witnessing a drop in buyer interest as seen in a survey released by the National Association of Realtors. This percentage has tripled in just a week. Fewer agents are reporting an increase in the number of homes on the market due to the outbreak, as more potential sellers are skeptical as to whether or not this is the right time to list their property. 

Coronavirus Already Pushing Mortgage Rates Lower

fall in stock market and real estate housing market due to coronavirus

A secondary emergency interest rate cut was announced by the Federal Reserve since the coronavirus outbreak. This brought the yield on Treasury bonds to almost 0%. Furthermore, interest rates can be highly impacted by the stock market crash which would be a great change in the spring housing market.

When investors start thinking of how risky the stock market is, they start considering to sell their stocks and buy bonds. This increase in demand results in higher bond prices. The higher bond prices get, the lower the interest payment (the yield) is relative to the price. And, when bond yields are lower, mortgage rates are lower too.

Coronavirus Disrupting Homebuilder Supply Lines

Approximately a third of all building materials come from China, states a study by the National Association of Home Builders. This is not even considering all of the typical finished products like bathtubs, sinks, and other home appliances. The virus could delay home construction for some time which will further impact the housing market.

It’s Not a Statewide Issue, but a Nationwide One

coronavirus is a worldwide pandemic affecting the spring housing market 2020

No matter your state, the overall picture is the same. From state to state, each of the local markets has a slightly different pace, but the broad point would apply across the markets. The outbreak is everywhere, and its impact on the housing market is everywhere too.

Eventually, everything will certainly be back to normal. We can’t yet say if it’ll be sooner or later. Restaurants will open again, people will go back to football games, and things will eventually bounce back. Before then, we can expect there to be some good home-buying deals, as well as some unfortunate business casualties along the line.

Do You Plan on Entering the Spring Housing Market Despite the Corona Virus Pandemic?

Curious as to how you should navigate the murky waters of selling your Houston home in the aftermath of the pandemic. Wondering what type of benefit you will see from buying a home in Houston today? Contact one of our Houston real estate agents today! Call us at 832-377-0812 to get started or complete the form by clicking the button below.

Corona Virus: Impact on Spring Housing Market | Jerrold & Co. | Houston, TX