Will massive unemployment effect the housing market?

Question

Check out this article from KCM below:Linke here: Will Surging Unemployment Crush Home Sales?

The main takeaway from the article is: "The housing market will have challenges this year. However, with the help being given to those who have lost their jobs and the fact that we’re looking at a quick recovery for the economy after we address the health problem, the housing industry should be fine in the long term."

What are your thoughts?

Scott Passman · Answer

There won't be a quick recovery, so yes, the housing market will be significantly impacted.  It's tough to know exactly how at this point, time will tell, but when thousands of businesses close down and millions of people can't pay bills it will absolutely effect real estate.  All the government and fed is doing is trying to throw quick band aids everywhere but every "band aid" they put on causes numerous other problems because things are being done so quickly without thinking through all the ramifications.  We are in for a bumpy ride, and like Account Closed mentioned it will probably take 3-6 months to really start showing up. Opportunities are coming, so start preparing now.

Michael Noto · Answer

It is to early to tell what the impacts will be and anyone who tells you they know what is going to happen is just looking for clicks on an article or trying to sound more informed than they really are. By the end of the calendar year we should have an idea of what the impact of shutting down our economy will be.

Keenan Fitzpatrick · Answer

Yes, of course. I'm not sure exactly how much but if I were going to Vegas I would bet that laying off a huge amount of people will have a negative affect on their ability to pay their bills. I think values will go down first as the market slows then there will be foreclosures shortly after. Showingtime is down 60%+ as well as the stats previously mentioned.

Nick Gann · Answer

I believe so, I have pulled equity out of properties (while still allowing for cashflow should rents decrease... conservative is good!) in an effort to prepare everything I can to purchase deals. It seems to me, there is much uncertainty about how bad his will actually be, and if you look away from the talking heads and into real economics (not hopes and promises) this is going to be insane.

Susan Tan · Answer

I agree that real estate is much more stable & resistance to change compared to stock market. Class A & other luxury areas continue to hold their value over time.

Will massive unemployment effect the housing market?

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