Many people think that this is the only pandemic we’ve had, but we’ve actually had past health scares and it’s interesting to look back to see how it affected the real estate market. We are now two months into a shutdown economy and the real estate market is starting to feel the effects. With limited showings, strict rules, and regulations, many buyers and sellers have pulled away from the market even though now is the busy home buying and selling season.
Existing home sales have dropped 8.5% from February to March but even year-over-year, there’s been an increase of .8%. These figures reflect the closing transactions that were initiated at least a month before so we really haven’t seen the full effect just yet. Let’s take a look back at some previous pandemics or health scares.
In 2009, the swine flu or H1N1 virus killed about 12,500 people and over 300,000 were hospitalized. This outbreak was fairly localized and even if you don’t remember, there was sporadic temporary social distancing, even though we really didn’t have a name for it at the time. The swine flu slowed the housing markets recovery somewhat but remember, we were just coming out of the housing recession, which ended in 2009. So it’s really difficult to determine whether the housing market was affected at all.
In 2003, the SARS outbreak unfolded, which lasted from spring to early summer for a total of about four months. This was also caused by a type of coronavirus, which infected 8000 people worldwide and caused nearly 800 deaths. Zillow reported that during the SARS outbreak home prices resisted a decline will transactions fell significantly as people practiced, what they called then, avoidance behavior. Travel, restaurants, and public gatherings were all limited. However, it was a quick recovery, and the economy recovered as well.
It’s interesting to note that SARS first appeared in Hong Kong and their economy in early 2000 showed a similar economy to America’s prior to COVID-19. During SARS, home prices in Hong Kong resisted a decline, will transactions fell slightly.
According to US News, “a streak of optimism in the US housing market might already be emerging. According to Zillow, pending home sales decelerated in the second half of March and remain substantially lower compared to February, but in the week ending on April 19, they were 6.2% higher than the previous week. Moreover, while inventory has gone down, home values remained steady at nearly $250,000 in March, posting a 4.1% year-over-year growth.”
As states reopen, buyers and sellers will start to emerge and I believe that the economy will pick up and flourish. If you’ve been holding off buying or selling in Snohomish County feel free to contact me at any time. We have safety measures in place and there are many ways to look at homes or to list your home in these uncertain times.