Coronavirus Housing Impacts
Last month I talked about possible effects of the Coronavirus hitting local housing markets. At that time, we had a travel ban in place for travel from China. Today, there are even more travel restrictions and school closures. At home, Pasadena Unified Schools are closed until April 6th, the school district has online learning and resources for lunch service during school at its website, here. California Gov. Gavin Newsom is urging people 65 and older and people with chronic health conditions to remain isolated. These restrictions are designed to help stop the spread of the virus. LA Times: Coronavirus Upturns Lives in California as Sweeping Changes are Imposed.
My Thoughts on the Impacts
Traditionally, many homeowners postpone selling a home until the spring and summer seasons. Logically, there are more homes listed when families with children often prefer to move during summer recess when possible.I am hearing concern from some home sellers about whether the spring and summer season will still be a good time to sell homes.
It will take some time to assess what impact the virus might have on home purchases and sales, if you're thinking of selling and are worried about a crash, yes, there are going to be a lot of impacts from the virus on the economy.
Yes, it is possible that a housing market softening might happen now. But it likely won't happen overnight. If you are planning to cash out, move, or relocate, this could be very close to the market peak. Hitting the market sooner with your listing might be a smart plan. If you can rent after selling then you can assess if the market is coming down before you buy your next home. That can be a great way to sell high and buy low. It is possible that the market will go up and not down thanks to lower interest rates. Nobody can time the markets, but that doesn't stop us from speculating and trying. Every family has to make very personal choices about when to sell or move.
The REALTOR Poll
The California Association of Realtors has released results of its polling on the impact Realtors expect the virus could have on the housing market:
1) Half of California REALTORS® expect there will be a negative impact on home sales and 49 percent said time on market will be impacted.
2) Conversely, 36 percent said they expect there will be no impact on home sales or time on market (38 percent).
3) Other areas that REALTORS® said would be negatively impacted were home prices (40 percent), closing (38 percent), supply (37 percent) and market competition (28 percent).
4) More than one-half (55 percent) said there would be no impact on market competition, closing (53 percent) or price (45 percent).
5) More than 1 in 4 REALTORS® (26 percent) said they had clients who put their home purchase or home sale on hold, and more than one-third of REALTORS® had clients asking them coronavirus market-related questions.
Mortgage Rates Are Down, Again
The federal reserve is pushing ahead new efforts designed to impact the financial markets which could spur the market with some extra incentives to buyers. Yesterday, the federal reserve board cut interest rates to zero percent. Mortgage rates have been at new historic lows as recently as just one to two weeks ago, so this rate cut should could have an immediate impact for anyone considering getting a home now.My recommendation is to check on refinancing your mortgage if you have one, and to shop for good rates if you're going to be buying soon. Most mortgage providers will give you a 30 day rate lock down.The mortgage market is very volatile right now. In my current mortgage transaction, here's what I've experienced: the banks are seeing an influx of lending applications with the rate drops. The rate can come down after a drop initially, and then as demand and applications come in, the banks may raise rates again later the same day as a result of the increased demand.Read more about the rate cut at the AP's Fed Takes Emergency Steps.
Lisa's Quick tips for March
Tax Season is here! There were announcements that tax season would be delayed this year due to the Coronavirus, but so far there is no announcement on who will be impacted or when the new deadline is (source CPA Advisor). My tip is to finish up with your taxes as scheduled if you are not already done.
If you have a mortgage, this might be a great time to consider refinancing to a lower rate. Check out this article from NerdWallet on refinancing your mortgage.