COVID 19 is a new reality for all of us. The outcome is unknown, and a lot of what is to come is dependent upon the duration of this virus. So, for now, I want to bring perspective to whether or not a pandemic like this can potentially affect the real estate market. Chief Economist for Gluskin Sheff and Associates Inc David Rosenberg says this situation can be compared more closely to 9/11 than 2008 “what 9/11 has in common with what is happening today is that this shock has also generated fear, angst, and anxiety among the general public. People avoided crowds then as they believed another terrorist attack was coming and are acting the same today to avoid getting sick. The same parts of the economy are under pressure – airlines, leisure, hospitality, restaurants, entertainment – consumer discretionary services in general.” He goes on to talk about how, consequently, the housing market is expected to act more like it did after 9/11 vs. 2008.
We are facing an economic slowdown, but that does not equal a housing crisis. Homes appreciated 3 out of the past 5 recessions and depreciated by less than 2% in the 4th. This graph shows that clearly and is compliments of Keeping Current Matters.
Interest rates are staying at historic lows, and as always, that is very good news for homebuyers. We all face uncertainties right now, but let’s hope we keep things in perspective and come out on the other side quickly.
I am available to answer any questions you may have about how this could affect your decision to buy or sell real estate on Kauai.