Thinking of selling your home and wondering what will be the impact of COVID-19 on the market. Well, you are not alone along with others who had planned to buy a new home. With more than 95% of Americans under some form of sheltering in place, many experts are warning that the American economy is heading toward a recession, if it’s not already in one.

According to the National Bureau of Economic Research, “A recession is a significant decline in economic activity spread across the economy, lasting more than a few months, normally visible in real GDP, real income, employment, industrial production and wholesale-retail sales.” COVID-19 hit the pause button on the American economy mid-March. Though, we may not yet be in a recession by the technical definition of the world today, most believe that history will show we were in one from April to June. Many fear that a recession will mean a repeat of the housing crash that occurred during the recession of 2008-2009.  However, unlike in the 2000s, the housing market in the U.S. enters this recessionary period under-built rather than overbuilt. This means that as the economy rebounds which it will eventually do, housing is set to help lead the way out of recession to economic recovery, Rising home values and stricter lender policies have also meant that homeowners are sitting on historically high home equity.

To further support the housing sector,  the federal government has implemented a moratorium on foreclosure and directed mortgage services to offer leniency on any mortgage backed by Freddie Mac, Fannie Mae or the Federal Housing Administration (FHA).  These are important measures that are designed to prevent a number of foreclosure and keep the bottom from falling out of the housing market, as happened in 2008.  Additionally, the Federal Reserve has implemented two emergency interest rate cuts since the COVID-19 outbreak bringing the yield on Treasury bonds to almost 0%. The higher the price of bonds, the lower the interest payment-called the yield-is relative to price. When bond yields are lower, mortgage rates are lower as well.

This spring selling season will not be as robust as previous ones. However, as the shelter in place orders are lifted and we see a dramatic decrease in the number of new COVID-19 cases, many sellers will come off the sidelines and list their properties.  In my view, a strong market will return in the not too distant future and we will not repeat the market crash of the 2000s.

Hope you have find this to be of interest. If you are thinking of buying or selling a property in Fort Lauderdale and not currently working with an agent, please do not hesitate to let me know.  I can be reached at (954) 547-9483 or via email at jkenney10f@gmail.com. Thanks and stay safe!