COVID-19 and the real estate market

Not exactly what I'd planned on talking about this month, but it's obviously been a major issue all over the country and many people are asking, so:

How is coronavirus (COVID-19) affecting the real estate market?

It seems like such a simple question on the surface, but there are many factors that are currently affecting our market. 

First, the market in our area started off very strong this year. I've had more conversations with new buyers and sellers this year earlier in the season than ever before. Our average days on market in the Denver area dropped over 50% in February while home prices rose a modest 2.5%. Last year saw homes enter the market and have price drops before selling, this year has been seeing the return of the multiple offer situation and homes are going under contract within days of being listed. So going into this health scare we've had a market that's been very strong.

Now what? A few things. The stock market's rapidly changing values have left a turbulent wake. The Fed originally responded by lowering interest rates even further, resulting in interest rates at an all time low, which spurred on both buyers to purchase and existing homeowners to refinance. Both of those strained the mortgage lenders and led to an increase in rates at the end of the week. I predict that will settle back down so rates will stabilize in the coming weeks before rising again, so if you're thinking of buying or refinancing for a lower rate then now is the time!

The rapid spread of the disease and resulting business closures will have a different kind of effect. Most real estate agents, lenders, and other people involved in the business are able to work remotely so it's work as usual for most of us. But government agencies are different, and if government offices close we may not have access to all the data we potentially need to complete transactions, resulting in extended closing dates. For a typical transaction this won't affect us too much, but talk to your agent to see if dates need to be changed. Lenders may need additional information to verify employment, including reassurances that those employers won't be shutting their doors, and it may take longer to get those verifications if businesses are temporarily closed. Our closings still need to be conducted in person so shutting down of title companies may also delay them.

But all is not lost! Yes, the stock and financial markets are experiencing volatility, but real estate has always been considered a sound investment. Most homeowners are experiencing quite a bit of equity due to rising home values and hopefully have a rainy day fund to avoid any shortfalls in case of temporary business closures. Our area real estate market continues to be strong, I'm still seeing homes enter the market daily and continue to take buyers out on showings. Selling a home may look a little different for a while as some agents decline to host open houses, but online exposure is still the best for reaching buyers anyway!  

A lot remains to be seen - how widespread will the disease be in Colorado? What will warmer weather bring? How will the disease spread in other states affect us? When will there finally be toilet paper at the grocery store?!

For now, sit tight and don't panic. If you're thinking of selling this year, now is a great time to enter the market while the buyers can still take advantage of record low interest rates and inventory is still low. If you're thinking of buying, now is a great time to take advantage of those interest rates while everyone else is watching the news and hunting for hand sanitizer! And as always, wash your hands and stay home if you're sick, protecting my family is even more important to me than selling a home, and we can always facetime :)

Do you have a question I didn't answer? Ask me! 

If I don't already know the answer, I'll find it for you. I love to learn and each question is an opportunity to learn something new!