Selling and buying homes in the era of The Corona Virus
In these times of fear of the unknown, how does one make a decision regarding selling or buying real estate? In the last 20 years, we have seen a number of crisis, many of which were serious.
2001 - Anthrax was commonly turning up in the mail and causing mass panic
2002 - The West Nile Virus arrived
2003 - SARS brought face masks and worry to our world
2005 - We wondered if Bird flu would be the new SARS
2008 - Brought the financial collapse that we could not see our way through
2009 - Swine flu emerged
2013 - There were headlines about nuclear war caused by North Korea
2014 - Ebola raised its head
2015 - ISIS captured the headlines again
2016 - Brought the Zika virus
2020 - Here is the Corona virus, which because of its infectious nature has brought wide-spread fear and nationwide measures not seen in recent history.
It's natural as humans to engage our fight or flight response. Watching basic supplies disappear from stores, along with school shutdowns and bans on large gatherings will cue our brains to believe this is one heck of a doozie. And a doozie it is. While we may argue about Fear upstaging the Virus as this plays out, there are real considerations at play for the young and elderly population, or anyone with a compromised immune system. More will come to light as this plays out over the coming weeks.
So what do with your real estate; whether buying or selling?
Every person and family has to do what is right for them. The best I can do, is to provide a series of data points to make it easier to make a decision. (You can see many videos I have created on the shift such as these. There is also a diagram on the shift here.)
Do what is right for you and your family. As we work our way through the early days of the outbreak in the USA, things will settle over time. Don't make decisions based on fear.
If you are having difficulty paying your mortgage, contact your bank or mortgage provider. If you are unable to make your mortgage payments due to COVID-19,(coronavirus), you have options to postpone payments, according to the FHFA - Federal Housing Finance Agency. FHFA Director, Mark Calabria spoke to mortgage servicers this week, to offer forbearance options to those who are affected. The Federal Housing Administration also announced mortgage payment assistance available to those impacted by the virus. If you are having difficulty for any reason at all - always get in touch with your mortgage provider to see what options are available. Don't wait until it is too late and risk foreclosure actions by the mortgage provider.
Although economists were saying that we were safely through a downturn in 2020, recent events may shift that thinking. Before Corona hit the headlines, The Fast Company Impact Council, a leadership group of 200 executives, gave their feedback on how people in business are thinking about a possible recession. About 4 in 10 respondents told the Fast Company researchers that they expect the global economy in 2020 to perform about the same. But remarkably, nearly 45% predicted that the next 12 months would be worse for business. Only 16% said that the global economy would be better.
If you are selling, home prices will likely be lower should you decide to wait a full season. That being said, none of us has a crystal ball, and the shifting market very much depends on not just your macro; but your micro environment. Real Estate economies tend to shift from block to block. Check out your Bestimate™ now - so that you can correct any discrepancies about your home on the internet. It's not just the auto value (only so valuable) that you are looking for, it's the beds, baths and square footage. Does the web have it correct? Check here.
Prices on homes you are purchasing later on (should you decide to wait) will also likely to be lower. If one were merely making a decision on $$$ - which is rarely the case - the decision would be tempered by whether you are purchasing a more or less expensive home, and what is happening in those price points. More money would likely be 'lost' on the higher priced home than the lower.
In the buyers' camp, are all the sellers who have to sell. Maybe they overpriced their home out of the gate a few months ago, maybe they've moved already or need to move. Buyers stand to gain from that seller's pain.
We have never seen interest rates this low. The Federal Reserve made another emergency cut to interest rates on Sunday, slashing the federal funds rate by 1.00 percent to a range of 0-0.25 percent. The Fed is trying to stay ahead of disruptions and economic slowdown caused by the rapidly spreading coronavirus. It’s the largest emergency reduction in the Fed’s more than 100-year history.
If your home is listed; and if you are viewing homes, take common-sense precautions. Use hand sanitizer or wipes, wash hands frequently, and use what we now now commonly as social distancing. What's more, make sure your agent produces a walking tour video on your home - this is necessary in 'normal' times, never mind in times where a video can save a buyer setting foot in any home they are not considering, and save a seller having buyers traipsing through their home. All agents have mobile phones, the vast majority of which can produce an adequate 'real life' walking tour. At AllstarPowerhouse - this is not new for us, we have produced a walking-tour video for every home we've listed since 2007.
Our walking-tour videos are featured on our Listing Storyboards™ - these provide a transcription of an interview with the seller, as well as the walking tour video, basic MLS data and lots of photos. All created virtually with no need to get face to face with an agent or a buyer - if you don't want to!
Ewa J. Antczak states: "As a psychologist working both at schools and in the private practice, I've seen both reactions to crisis situations: hysteria and denial. Both responses are very dangerous. Most of the time, moral values and principals are compromised by survival instinct. It is visible during pandemics or wars when supplies are limited and peoples lives are potentially in danger. I think people are still "in shock" and try to process what's happening - it will pass."
The outline that I personally found most helpful is from Abdu Sharkawy, Infectious Diseases Specialist at University Health Network. Follow him on Facebook for up to date information delivered with a tender look at the inside of what is happening. Here is one of his recent posts:
"I'm a doctor and an Infectious Diseases Specialist. I've been at this for more than 20 years seeing sick patients on a daily basis. I have worked in inner city hospitals and in the poorest slums of Africa. HIV-AIDS, Hepatitis,TB, SARS, Measles, Shingles, Whooping cough, Diphtheria...there is little I haven't been exposed to in my profession. And with notable exception of SARS, very little has left me feeling vulnerable, overwhelmed or downright scared.
I am not scared of Covid-19. I am concerned about the implications of a novel infectious agent that has spread the world over and continues to find new footholds in different soil. I am rightly concerned for the welfare of those who are elderly, in frail health or disenfranchised who stand to suffer mostly, and disproportionately, at the hands of this new scourge. But I am not scared of Covid-19.
What I am scared about is the loss of reason and wave of fear that has induced the masses of society into a spellbinding spiral of panic, stockpiling obscene quantities of anything that could fill a bomb shelter adequately in a post-apocalyptic world. I am scared of the N95 masks that are stolen from hospitals and urgent care clinics where they are actually needed for front line healthcare providers and instead are being donned in airports, malls, and coffee lounges, perpetuating even more fear and suspicion of others. I am scared that our hospitals will be overwhelmed with anyone who thinks they " probably don't have it but may as well get checked out no matter what because you just never know..." and those with heart failure, emphysema, pneumonia and strokes will pay the price for overfilled ER waiting rooms with only so many doctors and nurses to assess.
I am scared that travel restrictions will become so far reaching that weddings will be canceled, graduations missed and family reunions will not materialize. And well, even that big party called the Olympic Games...that could be kiboshed too. Can you even imagine?
I'm scared those same epidemic fears will limit trade, harm partnerships in multiple sectors, business and otherwise and ultimately culminate in a global recession.
But mostly, I'm scared about what message we are telling our kids when faced with a threat. Instead of reason, rationality, open mindedness and altruism, we are telling them to panic, be fearful, suspicious, reactionary and self-interested.
Covid-19 is nowhere near over. It will be coming to a city, a hospital, a friend, even a family member near you at some point. Expect it. Stop waiting to be surprised further. The fact is the virus itself will not likely do much harm when it arrives. But our own behaviors and "fight for yourself above all else" attitude could prove disastrous.
I implore you all. Temper fear with reason, panic with patience and uncertainty with education. We have an opportunity to learn a great deal about health hygiene and limiting the spread of innumerable transmissible diseases in our society. Let's meet this challenge together in the best spirit of compassion for others, patience, and above all, an unfailing effort to seek truth, facts and knowledge as opposed to conjecture, speculation and catastrophizing.
Facts not fear. Clean hands. Open hearts. Our children will thank us for it."
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