How Coronavirus will impact home price and rent

Question

I am a First time investor having a house under contract. The corona virus impact on stock market is scary. Want to see if any peer investors will have any opinion about how the corona virus will impact the RE market?

Michael Haas · Answer

I could see buyer's temporarily being drawn to single family homes over condo complexes while the Pandemic is still top of mind. There's a lot going on in the subconscious of the average home buyer that impact their perceptions of a property, and if the news is blaring "avoid crowds, stay out of public places!" I could see them shying away from larger condo associations, whether they realize the connection or not.

Home prices are intimately connected to employment markets though, so if the Coronavirus results in a business downturn or layoffs then 100%, that can effect the housing market. At the end of the day though its the layoffs and a economic downturn, not the virus, that would be the main cause.

Bob Okenwa · Answer

Unless millions of buyers drop dead simultaneously or banks stop lending, I don't see it being a problem so long as supply and demand remain constant. SARS, swine flu, and bird flu outbreaks all occurred in the last twenty years and houses were still bought and sold. Do your due diligence and you buy smart.

Account Closed · Answer

It will not have a substantial impact; the increased fear is simply increased by social media. Once people do their due diligence they'll realize how much they're overreacting. See some very simple facts below:

• -Corona virus cases: 96,951 (Fully Recovered: 53,981)-Approximately 2-3% deaths (most individuals elderly with pre-existing conditions)

https://www.worldometers.info/coronavirus/

• -Influenza cases: 3-5 Million
• -Approximately 300,000 - 650,000 deaths via influenza annually

REI will not be impacted.

Simone Chesi · Answer

I don't understand the logic in comparing something that has been already around for full years with something that has just started (and don't know how long is going to last) and since the numbers are different claiming that the second one is less. Not picking on you but I see this posted all the times from other people and I just don't understand the logic. To give you an example:

I have one house that rents for $1000/month so in 1 year I have $12k. I have another house that rents for $5K/month that I rented only for 2 months so $10k => the annual rent is lower in the second one ??? Why ???.

It caused a global economic shutdown in the freaking planet and people are not sure if this is going to impact the RE market? really?

Dan Rosenberger · Answer

About Feb. 10 the daily death toll reached 100 people. Big headlines. Around two weeks later the daily death toll dropped below 100 and has stayed below 100. Big headlines? No.

Erik W. · Answer

If the Corona virus has any measurable impact on the housing industry, the country is going to have much bigger problems than you or I can prep for. The news media--today more than ever--operates on this thought: "If it BLEEDS, it LEADS." This give them incentive to turn every mole hill into a mountain so they can get views/clicks which turn into advertising revenue. So just realize that the stock market drop is the result of people panicking. Largely for no legitimate reason. That could change over time, but today there is no reason to panic.

To be clear, I am not saying there is nothing to be concerned with, but as far as any disease impacting one of the fundamental industries of our country that goes well beyond the scope of individual investors and/or small groups.

Last thought: Warren Buffet says, "Buy when there is blood in the streets." The media specializes in dumping tractor-trailer loads of blood in the streets.

Kase Knochenhauer · Answer

@May Zhang - I don't think that this virus will have any noticeable impact on the national real estate market.

However, if a significant outbreak occurs (say in Seattle) we may see a temporary slow down of home sales locally - but likely not nationally.

When everyone runs away from an investment - it's often the very best time to buy. So even if prices change temporarily, your long term valuation shouldn't be impacted. :)

How Coronavirus will impact home price and rent

How Coronavirus will impact home price and rent

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