The overwhelming majority of the economists I have been following to try and get a handle on the near future of real estate all seem to have a similar take on what is happening. They feel this is different than the housing collapse we saw in 2008. The overwhelming sentiment is that we will come out of this pandemic with strength in the real estate market. Most site the following reasons for that thinking:
1) our economy was strong prior to the pandemic and it was the public health crisis, not a systemic issue with the economy, that drove the downturn
2) mortgage interest rates are low
3) there is a shortage of housing (at least in San Diego)
One of the best articles I read on this was from Mark Fleming, an economist who works for First American. He added “house buying power” as another reason that he sees the housing market weathering the virus. To read his take on this click here.
Do I think we will see a softening in the market? Yes. We are already seeing it in the luxury market. So far I haven’t seen it in the first-time buyer market though. That may change if our businesses don’t open soon but right now we still see first-time buyers with purchasing power. Some of that may be attributed to our large military market. They are still employed and buying with VA loans. Whatever the case I feel confident we will weather this storm and come out with buyers and sellers ready to go.