Coronavirus Impact On US Real Estate Market

Coronavirus Impact On US Real Estate Market

How will an outbreak of coronavirus affect the US real estate market? Will prices go down or, on the contrary, will rush up sharply? Most experts adhere to a pessimistic scenario. But not all.

Real estate experts are gradually starting to realize that the industry is already experiencing hard times, maybe in conditions of deep stagnation, and even crisis. The fact is that the construction industry is more dependent on the general situation with coronavirus than many others.

Builders cannot be sent home to work remotely. Due to the cancellation of flights, thousands of tons of cargo needed for the industry got stuck, including elevators, facing materials, electrical equipment, plumbing, manufactured in China.

Due to the slowdown in construction, the market supply is falling, which invariably leads to higher prices. Even if the coronavirus outbreak ends in a month or two, the lag will have to be overcome for a very long time.

There is one more concern. The fall in stock quotes will again increase the attractiveness of real estate investments, and massive injections into the real estate market amid limited supply by nothing more than a jump in prices can not be completed.

However, there is a limiting factor. Coronavirus, as already understood, leads to an economic downturn and, as a result, to a decrease in private consumption. In the event that companies begin to go broke en masse, and thousands of Americans find themselves on the street, it will obviously not be time to buy real estate. And this, in theory, should lead to lower prices.

While there is no exact data on the demand for mortgages, however, preliminary measurements show that a slowdown is also visible in this area.

If you look for good news in this mess, you can only note that in conditions of instability, it is no longer contractors who dictate their rules to the market, but the market (that is, buyers) to the contractors. The whole question is which scenario will prevail — optimistic or pessimistic.

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