COVID-19 and Its Affects on the Housing Market

Many people have been asking me my take on how COVID-19 will affect the housing market. Here’s my take along with some things you can do at home to keep yourself busy (especially with your kids who you are now homeschooling).

Although things look bleak in our day to day lives, when it comes to real estate, your buying power is TREMENDOUS right now! This stands out as an ideal time to purchase property. I continue to hear people say that they’re waiting for the market to drop but the reality is that the buying power provided by lower rates outweighs lower property values. In addition, there are no signs that the real estate market is slowing down.  Rates may not be zero but they are still amazingly low. Ask any investor, the time to jump in is when everyone else is running away. If you have been thinking about buying, now could be your time to jump in 🏡

Here’s a recap of what we’ve seen thus far:

  • The Federal Reserve slashed interest rates to near 0% on Sunday in an emergency rate cut.
  • Many people have asked me if this means that their mortgage will go to 0% interest. The quick answer is no. This is the rate at which banks lend money to each other. The consumer will not see such low rates.
  • The 10-Year Treasury (the real thing that affects mortgage rates) reached record lows last week. We saw mortgage rates plummet. With the low 10 Year and the Fed rate cuts, there is a lot of incentive for banks to lend money to you. 🤑
  • Mortgage rates have been raised a little bit so that lenders can catch up on the influx of refinancing requests they received a couple of weeks ago. I would expect it to stay put for a while but eventually will come back down to the roughly 3.5-3.0% rates we were seeing.
  • Homes are still selling for record prices although there are some different hurdles in the process, brought to you by COVID-19 🦠

For those of you “working” from home 😛 here are some things you can do (also some resources for you to use with your kids)

  • Exercise – dust off that treadmill you swore you’d use every day! Set a schedule that includes a daily work out.
  • Spring cleaning – You know that closet you keep saying you’ll clean out, now’s the time!
  • Enjoy quality family time. Play board games, card games, eat family meals. For most of you working parents, time with your family can be limited. Don’t view this time as a curse, view it as an opportunity to get some quality time.
  • Check out some of these virtual museums: Smithsonian Museum of Natural HistoryNational Gallery of Art and the Musée d’Orsay. You can also check out Google Arts and Culture which has many things to virtually explore!
  • SUPPORT YOUR LOCAL BUSINESSES – these small family businesses are the ones feeling these closures the hardest, so if you’re thinking about ordering take-out hit up that mom and pop shop down the street. They need it the most!
  • Tensions running high? Try doing some Mindfulness together. Go on YouTube and find guided mindfulness that suits you.
  • Put together a list of homes you’d like me to take you to see!

While we don’t know what is to come, I leave you with the words of one of the greatest investors.

“Be fearful when others are greedy. Be greedy when others are fearful.”

– Warren Buffett

 


Posted on March 17, 2020 at 10:50 pm
Josh Stepakoff | Posted in COVID-19, Housing Update |