There are a lot of stories, rumors, and hearsay floating around about the novel Coronavirus, COVID-19. It makes sense: many people are scared about the immediate and long-term effects that this outbreak could have.
However, much of the information out there is dangerously misleading. There are a lot of Coronavirus myths that have made their way into the conversation. These myths are, in many cases, only making people more worried and scaring them into inaction.
Along those lines, there are a lot of rumors and myths about how the Coronavirus will affect the housing market in the coming weeks and months. Many of these myths are based on pure speculation and paint a much grimmer picture than the truth.
I want to take this opportunity to bust these Coronavirus myths and share our experience of helping families with their real estate needs despite the panic surrounding COVID-19.
1. The Housing Market acts like the Stock Market
This is a concern that a lot of people expressed in recent weeks. When the COVID-19 first began to gain speed and visibility, the international stock market rapidly collapsed. In fact, the crash that occurred at the end of February 2020 was the sharpest decline that the stock market had seen since the disastrous market collapse of 2008 — and one of the worst crashes since the beginning of the Great Depression in 1929.
Here’s the thing, though — the housing market does not act like the stock market! For one thing, real estate tends to be far less volatile than stocks. Your home’s value might change (which is why it’s good to know how to determine what your home is worth), but it is still a piece of tangible property that will retain — and increase — its value.
In fact, the housing market is trending in the opposite direction of the stock market during the COVID-19 fear. January 2020 was one of the strongest months in recent history, and the market is remaining stable. Because stocks are so volatile and real estate retains its strengths, now is a great time to invest in real estate.
The Federal Reserve requirements have driven mortgage rates to near-record lows, which means that you can take this opportunity to refinance your home or move up to a more valuable property — especially if self-quarantine is making you realize that you’ve outgrown your home!
2. 2008 Is Repeating Itself
This Coronavirus myth ties closely into the first. Because people are seeing the stock market fall, they panic and assume that this will be a repeat of the 2008 housing crisis. To bust this myth, you just have to look at the cause of each crash.
In the 2008 market crash, the stock market was tied to home values — and those values were part of a bubble caused by over-aggressive lending policies. When that bubble burst (as bubbles tend to do), the stock market collapsed in accordance.
In the current stock market instability, the decline is not due to housing values. Rather, the collapse comes from a number of international concerns. One of these, obviously, is the spread of COVID-19 novel Coronavirus and the issues that this poses for commerce. However, there are other factors at play including economic tensions between Russia and Saudi Arabia.
So, even though the stock market resembles conditions in 2008, the conditions are entirely different. It’s still too early to predict exactly how the 2020 crash will continue to affect global economies — but it would be incorrect to assume that it will follow the pattern from ten years ago.
3. No one is selling a home
This is a myth that a lot of people are perpetuating. They think that because they can’t find someone to sell a home, everyone is pulling from the market in fear. The truth is, good real estate agents and teams are still putting together deals — both by traditional methods and by helping people with finding off-market homes.
While there are many home-sellers who have pulled their listings, the amount of deals happening in the DMV is staying fairly stable. Do you know why that is? It’s because the people who are staying on the market are dedicated to selling their home.
These motivated sellers are more likely to sell their home quickly. So, even though lower-motivation sellers might be pulling their listings, the right real estate team can connect sellers and buyers who want to leverage the unique market situation at the moment.
4. No one is buying a home
On the flip side, a lot of people are spreading the myth that no one is buying a home due to the COVID-19 Coronavirus. Just like with home sellers, the Coronavirus hasn’t scared away all the home buyers — just the less-motivated ones.
In fact, the Coronavirus has created a powerful advantage for home searchers. Federal Reserve rates mean that mortgage rates are low, which is especially great for people who want to buy and sell a home at the same time, moving up to a more valuable home.
On top of that, some motivated buyers are finding less competition, which is especially advantageous in a seller’s market like Washington DC or the rest of the DMV.
To give you a real-life example, our team last week closed and ratified 12 properties in one day which is a personal best this year!
The coronavirus is not scaring away all the buyers — plenty of people are still in the market for a new home, and they are highly motivated to buy!
5. Social Distancing kills home showings
With health-focused organizations closing down large gatherings and advocating for social distancing (remaining 6 feet apart from others at all times and self-isolating), the myth has started that real estate agents are unable to host open houses and showings.
The truth is — as is usually the case — innovative real estate teams have already created solutions to these concerns. At the Keri Shull Team, we are hosting online open houses and conducting Virtual Home Buying and Home Selling Consultations. This way, we can put your mind at ease and make sure that you stay healthy.
The Coronavirus myths that are swirling around don’t usually stand up to scrutiny. In the case of rumors involving real estate and COVID-19, it’s smart to consult the market experts who spend each day tracking and dealing in real estate. At the Keri Shull Team, we specialize in analyzing the market and creating a customized plan to fit both your specialized needs and the status of the real estate market.
Next Steps For Your Real Estate Needs
If you are worried about how the Coronavirus will affect your home search or your home’s value, contact the Keri Shull Team today! We’d love to speak with you about your specific situation and help you figure out the next steps to take. Just click here to schedule a time to speak with one of our experts today!