Coronavirus and the Foreclosure Market: What to Expect
MIAMI, March 13, 2020 (Newswire.com) - The following is an analysis of the 2020 foreclosure market and Coronavirus widespread from BankForeclosuresSale.com.
The Coronavirus disease (COVID-19) outbreak has taken the world by storm. In addition to its impact on the health of hundreds of thousands of people, it's bogging down almost every industry from one side of the world to the next.
With each passing day, the impact of Coronavirus on the real estate market deepens. While it's not widespread just yet, real estate agents, home buyers, and home sellers are all preparing for the worst.
Buyers on the Rise?
Even though Coronavirus is keeping a growing number of people indoors, it hasn't done much to curb the number of people buying homes.
But there's a reason for this: as of early March 2020, mortgage rates reached an all-time low, with the average rate on a 30-year fixed-rate loan dropping to 3.29%.
With rates this low, you can expect anyone in the market for a home to consider taking advantage, despite what's happening with Coronavirus.
Moving forward, it'll be interesting to see if low mortgage rates are enough to keep buyers interested, or if they begin to shy away as the result of economic fears and market instability as a whole.
The Impact on Sellers
In many parts of the country, it's a buyer's market. For this reason, sellers already have their backs against the wall, as they don't have the upper hand in negotiations.
However, with rates dipping, there's a good chance that a seller's market is on the way. Price wars will heat up as long as prospective buyers continue their search. And when this happens, you can expect the average cost per transaction to increase.
The primary concern among sellers is increased fear around Coronavirus, which will keep people indoors and chase buyers away as they're concerned about jumping into such a big purchase during a time of economic uncertainty.
Real Estate Agents are Changing Their Approach
With Coronavirus fear on the rise, real estate agents are beginning to take additional action to maintain their safety, as well as that of their clients.
For example, some agents are handing out bottles of hand sanitizer at open houses. Others are suggesting that they don't shake hands as a greeting. And some are even going as far as to ask people entering a home to put on gloves and a mask.
Furthermore, a growing number of agents are relying more heavily on technology, such as communicating with clients over FaceTime, as opposed to meeting in person.
The Impact on the Foreclosure Market
In the United States, Coronavirus is still in the early stages. Despite thousands of confirmed cases and a handful of deaths, there's still a lot of unknowns about what comes next.
There's always a possibility that something as serious as Coronavirus could result in an uptick in foreclosures. We're already seeing real estate stocks taking a huge hit. For example, FTSE Nareit All REITs index declined roughly 7.7 percent on Monday, March 9, 2020.
If the economy continues to lag behind, many homeowners may find it challenging to keep up with mortgage payments. Subsequently, foreclosures could spike, thus forcing people out of their homes, while also providing investors with additional opportunities.
According to foreclosure expert Simon Campbell, it's still too early to know what will happen next in the real estate market.
"It's still going to be a few weeks or longer until we have a better idea of how Coronavirus will impact the real estate market, as far as foreclosures are concerned. For example, Chicago and Orlando were already hot foreclosure markets, but we could see additional activity in the months to come should the economic impact of Coronavirus advance."
One other thing to keep an eye on is the response of mortgage lenders in the United States. In Italy, for example, mortgage payments have been suspended for the time being.
The real estate market as a whole is adapting to Coronavirus, with more changes to come in the near future.
Media Contact:
Simon Campbell
scampbell@bankforeclosuressale.com
Source: Bankforeclosuressale.com
