The coronavirus, or COVID-19, is the topic of every conversation, right now. Since its inception late last year, the virus has put a strain on the global economy, and President Trump has demanded that only essential workers and businesses remain in operation at this time.
One essential business that has been affected, is the real estate business.
According to the National Association of Realtors, U.S. mortgage rates hit an all-time low in early March, with the average rate of the 30-year fixed-rate mortgage dropping to a staggering 3.29 percent.
Jules Straker, a Realtor with Tallahassee-based Coldwell Banker Hartung, said that commercial real estate has suffered tremendously because of the virus, but residential real estate still brings steady business.
“Commercially, you know, it’s pretty slow; well, it has slowed down significantly, and that’s the main sector of the market that has suffered the worst,” Straker said.
Although residential real estate is steady, it could be in potential danger. The National Association of Realtors suggested that “the potential conundrum for lower mortgage interest rates is that it could create a slippery slope where more buyers enter the market trying to get a good deal, allowing sellers to jack up their prices.”
During this time of uncertainty, one is tempted to compare it to the Recession of 2008.
According to History.com, that Recession was a global economic downturn that devastated world financial markets as well as the banking and real estate industries. The crisis led to increases in home mortgage foreclosures worldwide and caused millions of people to lose their life savings, their jobs and their homes.
Realtor Karen Brown said that she personally believes that the 2008 Recession was more severe than what is happening now.
“In 2008, we had a large majority of Americans who had equity in their homes and had pulled that equity out already, and so they didn’t have a lot to fall back on,” Brown said. “We have people who are more stable in their homes [now], more so than they were in 2008.”
Brown’s brokerage is Keller Williams Jacksonville Realty, where each office is independently owned and operated.
With reassurance from Realtors, some might even ask if it would be safe or wise to purchase property now.
Jules Straker said it is always a good time to buy, but it depends on the financial stability of the buyer.
“We won’t see a true impact for a while … it’s a great time to buy, but the thing is, ‘Are you financially solid?’ and ‘How long before you could potentially lose your job?’” Straker said.
All in all, Realtors are uncertain of the outcome during this pandemic, but they do have high hopes that things will turn around for the better.