How will coronavirus affect the housing market?

[Zaphod]

Just went under contract on a house and we definitely got a deal we would not have gotten 3 weeks ago and would have been laughed at 6 weeks ago. I’d estimate it at a full 10% off what it woulda reasonably been if the timing were different. Who knows, maybe I could get another 5% if we waited a few more months, but I doubt it. Greedy when others are fearful...as long as the numbers make sense otherwise. We’ll see in 10 years if it was a good timing decision or not!

I'll take the other side of this. You'll be shocked with what you could have gotten in a couple months.

People are not fearful, theyre anxious.

Layoffs are just starting, etc...it takes time to ripple through the system.

Shocked that after all thats happened people still arent seeing it.

[White.Beard.Doc]

I'm with Zaphod on predicting this one. Mortgages will remain cheap, but incomes will be down in the aggregate way more than mortgages.

And buying a home is a leap of faith into what the future will bring. Faith in the likelihood of good times ahead is going to be broken very badly in the coming months. Consumer sentiment will tank to a lower level than it did in 2008.

My guess is significantly falling housing prices for all but the entry level, least expensive starter homes. And falling rents for anything but the cheap starter apartments as well.

[Lordosis]

The house down the street went up for sale a few weeks ago. I think it is priced kind of high even without a pandemic. I might not get a new neighbor for a while.

[MSooner]

We had ours listed for 2 days and took it off (now under shelter in place--no showings, appraiser, or inspector anytime soon so no point in being listed). We're going to try again when things start to get better. I'm contemplating being a landlord for a few years as well. We shall see.

[Cubicle]

^^^ Landlord... ugh. Not fun if you've never done it before.

I predict a downturn in housing transactions & price. Not sure how bad it's going to get. Like others, dependent on how long this drags on (& the total damage it causes).

[uptoolate]

I expect a big downturn here for several reasons. People feel poorer due to contraction of equities and slow down in the economy. Off-shore money will decrease due to travel restrictions which are likely going to be in place for quite some time. Interest rates were already at historical lows so I don't think the recent drop is going to have an impact. People who are leveraged in both equities and real estate are going to have to sell. And in the worst case scenario, and hopefully this won't come to pass, there is the possibility that housing stock is going to be freed up due to incapacitation or death of elderly individuals living alone or as empty nester couples in family homes. And finally, the market here has been overheated for a very long time and a correction was seemingly overdue.

[beagler]

Take large mortgage payment. Add substantial income reduction. Yield foreclosure/ selling/ price drops.

[StateOfMyHead]

^^^ Landlord... ugh. Not fun if you've never done it before.

So never fun but it can be profitable and or tolerable if in a jam. Something to consider at present is tenants may have difficulty paying rent. I wouldn't buy a new property with intention to rent right now but in the near future if prices are favorable and people are relocating or have been displaced it could make for good opportunities.

[CordMcNally]

at the risk of sounding unsophisticated how can we predict anything but a pretty big hit the housing market?

I'm not sophisticated regarding real estate (or anything else for that matter) but I agree with you. I can't fathom an outcome where housing isn't hit pretty hard. I also didn't see COVID-19 coming so obviously crazy things can happen.

[East coast]

IDK - as evidenced by my recent purchase, I'm a bit more bullish than others on RE market. Certainly understand that things can/probably continue to/will decrease, but I think there's a lot of recency bias in what I read in the doom posts above ("annihilate", "big downturn") because the last go around with recession was centered upon the housing market.

It's obviously more of an opinion and i'm not motivated to link sources, but housing doesn't always tumble with stocks/economy and certainly not to the same degrees. There aren't structural deficiencies in the housing market like a decade ago (that i'm aware of!) and while very local, my market is not bubble territory. Also, keep in mind, we are at one of (if not _the_) lowest inventory situations in modern day history before all of this started. AND as evidenced above, ppl are not putting their houses on the market - supply/demand matters.

The disclaimer on my comment is also two fold - I don't believe we've ever had a situation like we're in now with near-complete economic shut downs for a period of time, so this time is different in the sense that I can't say "here's how markets will react!" (in other words, I have not clue and I'm not a genius like EntrepreneurMD claims to be at predicting things) and 2 is that we were going to buy our first home (at lower than 1:1 yearly income to home price), so it didn't stop us - I'm not talking about throwing all your money into RE.

[Josh Mettle]

Things are changing rapidly on a daily basis. Sellers may be taking their homes off the market for a few months, but we do not see home values decreasing - the increase just my stagnate a bit.

As for rates, the market is extremely volatile right now, and rates did see a significant spike last week with all the financial footwork happening in Washington, but they have stabilized and are slowly coming down again. There can truly be no way of knowing for sure - everyone is just taking it day by day.

[mamaham]

will mortgage rates go down in april 2020?

https://themortgagereports.com/32667/mortgage-rates-forecast-fha-va-usda-conventional

So I continue to wait.... who knows what will happen. The people that make these predictions are like meteorologists, they make a lot of predictions but nothing happens if they are wrong....

[Bonez]

I have a lot of "favorited" houses on apps like Redfin. In the last few days my phone has been sounding off frequently with notifications of price-drops on many of those homes. Obviously anecdotal evidence, but seems as if prices are declining. Mortgage rates aren't as low as they were 3 weeks ago.

[Peds]

I have a lot of "favorited" houses on apps like Redfin. In the last few days my phone has been sounding off frequently with notifications of price-drops on many of those homes. Obviously anecdotal evidence, but seems as if prices are declining. Mortgage rates aren't as low as they were 3 weeks ago.

none have for me

[East coast]

From the Washington Post - "New-home sales grew unexpectedly in April, eking out a slight gain instead of the steep decline that had been forecast, the U.S. Commerce Department reported Tuesday.

Sales of new, single-family homes rose 0.6 percent in April — a modest but significant advance given the nearly 40 million job losses the nation has endured since the coronavirus took hold roughly 10 weeks ago."

As I said earlier in this thread - Who knows on how the coronavirus will affect the market !!! But if you go to the source material, the US Dept of Commerce says that April sales were down 6% relative to last year April - that seems to be the news more than March to April uptick no matter how surprising it is.