As my clients ask for updates on the real estate market, I remain thoroughly optimistic. It may seem counterintuitive to suggest in this Coronavirus era that the housing market is in good shape. However, even amidst this rough patch for the U.S. economy, properties are going on the market every day. Real estate business is moving forward with showings, inspections, appraisals and closed transactions. Some buyers want to take advantage of low interest rates and low competition, whereas sellers benefit from this seller’s market due to continuing low inventory.
Looking ahead, leading economists indicate some silver linings in the Coronavirus clouds. Consider this analysis from Wells Fargo Investment Institute:
“We do not expect a repeat of the severe recession of 2008-2009, because the virus and oil shocks are not endemic to the financial system but are, rather, external. Once the virus infection rate peaks, we expect a recovery to gain momentum into the final quarter of the year and especially into 2021.”
Other major financial institutions such as Goldman Sachs and JP Morgan are calling for a rapid, V-Type recovery with a sharp decline in Quarter 2, followed by a steep rebound in the second half of this year. A recent study from John Burns Consulting notes that V-shaped economic recoveries of past pandemics have had minimal impact on housing prices.
This economic prognosis is good for homeowners and buyers in the Foothills of Northern Los Angeles, where property values have historically remained strong. It’s one more reason that I remain a staunch believer in real estate as a sound investment.