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How will coronavirus affect the housing market?

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  • StarTrekDoc
    replied
    Normally, SF and Manhattan have enjoyed fairly robust and unique demand curves. even the housing crisis affected minimally and first to recover and sustained rise. But Covid is a different beast so flight to suburbs may actually take root -- but then again the young professionals are the ones to drive the gentrification and they are packing our streets today leading the charge for change. So, I wouldn't count it out either.

    Dreams change. Good plan to save for next years to see if yours does as you save up the kitty to enact your plan.

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  • White.Beard.Doc
    replied
    Originally posted by venacontracta View Post

    My wife and I are a dual-physician couple in fairly well paying specialties, just entering into practice in a few months. We're renting for the first couple years out to make sure we like where we're going but the ultimate dream is living in the center of a VHCOL city and doing exactly what you described (I know that is an unpopular approach here). It will be interesting what happens to the price of urban homes with so much unrest going on and a segment of people who can afford to live anywhere saying peace out to the city.
    Sellers and developers in Manhattan are struggling with oversupply at the high end, falling demand, and very strong downward pressure on the market. I am not as familiar with the San Francisco market, but have heard rumblings of the same. You may be able to snap something up for a good price if current trends continue for a while, but so much is unknown. If there is no effective vaccine in the near term and the cases keep rising, current downward pressure could intensify. But so much of this is unknowable right now.

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  • venacontracta
    replied
    Originally posted by White.Beard.Doc View Post

    What is shaping up in this area is quite interesting and quite different from what I expected. Pre-covid, the preferred path for many uber wealthy finance, law and medicine professionals was to raise their children in the heart of our VHCOL city, send the little ones to private school, and enjoy the arts and fine dining city lifestyle. Post-covid, these same folks are holed up in their country houses at the beach and in the mountains with the little ones and the nannies, working from home.
    My wife and I are a dual-physician couple in fairly well paying specialties, just entering into practice in a few months. We're renting for the first couple years out to make sure we like where we're going but the ultimate dream is living in the center of a VHCOL city and doing exactly what you described (I know that is an unpopular approach here). It will be interesting what happens to the price of urban homes with so much unrest going on and a segment of people who can afford to live anywhere saying peace out to the city.

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  • nephron
    replied
    I thought that the housing market would have crashed by now but then started thinking and reading more about the economics of it all. People who lose their jobs who own their homes are not going to want to sell their homes right now because they need a place to live and cannot move until they get a new job (to qualify for rent, mortgage, etc). Landlords looking to get out of the long term rental market/get more equity are unable to get tenants to move out because they cannot evict anyone most places and most people are not looking to move in this environment. The housing supply was already limited prior to the pandemic and I would imagine that a lot of new home constructions have paused or stopped. I think that the only people who may be looking to exit their property these days are airbnb rental home owners who realize that they have too much mortgage to pay and no way to pay it. I don't think most of the people who were over-extended were single family home owners in this market though. Anyways, if I had to guess, I would guess that the housing market is "frozen" with all of these people who would have been moving but who are now stuck because they wherever they were planning on moving is not hiring anymore so they are staying put. I think that in a few years when things get to be more normal, the housing market will go down because people a lot of people will have less income to spend on housing and there will be more supply on the market when you get your normal people moving from one area to another for jobs. That's my guess on what is happening in the housing market anyways.

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  • White.Beard.Doc
    replied
    So I wrote my post above with my thoughts about the new Covid economy and real estate more than 2 months ago.

    What is shaping up in this area is quite interesting and quite different from what I expected. Pre-covid, the preferred path for many uber wealthy finance, law and medicine professionals was to raise their children in the heart of our VHCOL city, send the little ones to private school, and enjoy the arts and fine dining city lifestyle. Post-covid, these same folks are holed up in their country houses at the beach and in the mountains with the little ones and the nannies, working from home.

    We live in a very close in suburb where the commute is short, the schools excellent, and the fresh air sweet. The city dwellers are now looking to get out of the city to escape the virus. So the 3.5M house down the block along with the 100k annual property taxes just sold to one such uber wealthy former city dwelling family. It offers space, privacy, along with bucolic gardens and a pool, since the kiddos can no longer participate in any summer programs.

    The higher end rentals in this area are going to multiple bids. Real estate is very local. In this village, demand is through the roof, no inventory, and huge competition to find a place to live. It seems many well paid tech and finance folks are doing just fine in this new Covid economy. Very interesting indeed.

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  • Cubicle
    replied
    I know multiple "sellers" who are waiting to list. So agree on the "low inventory" aspect.

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  • StarTrekDoc
    replied
    Inventory low - prices stable; no new listings - good homes listed get sold fast-- DOM: <7 days; so demand good in our zip code. high priced homes >2M sitting. but 1-1.5M moving easily.

    Leave a comment:


  • Jaqen Haghar MD
    replied
    Originally posted by East coast View Post
    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.
    You saw this type of reporting all through the housing crash around 2009. “News flash! some housing sales up in March!” (compared to feb.). Usually reported by the National Association of Realtors.

    BTW, existing home sales fell 17.8% for the month of April compared to March 2020, worst in 10 years. Interestingly, prices held though.

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  • East coast
    replied
    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.

    Leave a comment:


  • Peds
    replied
    Originally posted by Bonez View Post
    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

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  • Bonez
    replied
    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.

    Leave a comment:


  • mamaham
    replied
    will mortgage rates go down in april 2020?

    https://themortgagereports.com/32667...a-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....

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  • Josh Mettle
    replied
    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.

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  • East coast
    replied
    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.

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  • CordMcNally
    replied
    Originally posted by MPMD
    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.

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