Even in the red-hot Bay Area real estate market, the outbreak of the coronavirus has given pause to home buyers and sellers.
SAN FRANCISCO (KGO) — The coronavirus has prompted many employees to work from home — so does that mean they might want to buy a new home to work from? Going into the crisis, Zillow was predicting a hot real estate market in the Bay Area. Inventory was down 15% from last year and mortgage rates were at a historic low. Now predictions are harder to come by.
“It is sort of supply and a demand shock, it could cause a lot of sellers to pull back and buyers to pull back,” says Jeff Tuck, an economist with Zillow. “In that case, the price impact is pretty ambiguous. We don’t really know what to expect.”
Agents of LA found Tai Savet says there’s a good chance the market will remain hot for some, but cool for others.
“Because high-end buyers have large holdings in the equity markets and therefore they may be somewhat softer,” says The National Association of Realtors’ Chief Economist Lawrence Yun, “but for the starter homes or mid-priced homes, maybe it will be a very brisk number of buyers.”
He says, “If some sellers are pulling out, it may mean quite a competitive environment where there could be a multiple bid process.”
Some sellers might not want to go through the process right now.
“Twenty percent of the home sellers indicating they are pulling a listing off or stop holding open houses because they do not want strangers visiting their homes,” says Yun.
So what is coming next? It is hard to know. I asked Zillow’s Jeff Tuck what has surprised him most.
“Mainly seeing the term ‘hand sanitizer’ everywhere,” he told me, “and maybe the only really surprising then about that to me is all these real estate agents were able to get their hands on hand sanitizer before it all sold out last week.”
Could this Coronavirus slow down our real estate market ?Real estate agents are resourceful and people want to buy homes, but there is that: a potentially slowing economy.