Corona - 31.3.2020
I was officially blown away by reading English articles about the state of the Corona and the US economic situation ???? ♀️???? ♀️
US President Trump, announced today that social exclusion and guidelines to stay home in most U.S. states will be in effect by the end of April.
According to the different models, the peak of the outbreak in the US appears to be in about two weeks - about April 13.
A few days ago, the president claimed that the United States would return to full activity on April 12 ... I wonder what made him change his mind.
But we came here to talk about real estate!
It appears that - Zillow Offers, Zillow's purchasing arm, temporarily suspended its acquisitions following the Corona crisis (maintaining employee health, and various stay-at-home guidelines), Zillow continues to Open and redfin - who also announced similar things.
The obvious conclusion is that when big players like these companies (and not only by the way) stop asset purchases, then there will be less competition, which means less demand and that means a halt in price increases maybe even… price drops ?!
Who knows, who knows…
But there was something interesting about the article I read today:
* Zilo did research on housing prices in previous epidemic times, and concluded that indeed sales and deals decreased drastically at the time of the outbreak, but housing prices fell only slightly.
This makes sense because prices are difficult to change / decrease when there are few transactions. Briefly, previous epidemics have put the housing market on Pausa.
* Before the epidemic, there were many buyers in the market - low unemployment, a steady rise in salaries, low interest rates on mortgages, all signs of a high demand for housing. But since the beginning of the epidemic - we have seen a dramatic increase in unemployment, and indeed it has also been seen in traffic on real estate sites, some of which report a 40% reduction in traffic.
Of course we currently have no way of knowing what exactly will happen, what it is, predicting the outbreak of the virus only in about two weeks in the US.
We will probably experience major changes in the real estate market by 2020
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