The coronavirus has been impacting the country in various ways, but its impact on the economy is becoming more and more concerning with each passing day.
For example, the stock market has experienced its biggest drop since the Great Recession of 2008.
However, it’s still unclear what the effects will be on the real estate market.
We could see the following:
- Real Estate Prices May Drop
Commercial real estate prices may drop as a result of foreign investors not having access to the U.S. market. - Vacancy Rates And Bad Debts May Increase
As more and more people lose their jobs for longer periods of time, we could see an increase in unpaid rents, vacancy rates in multifamily properties, and bad debts. All of this could also impact the property owner being able to pay the property’s mortgage. These events could trigger a recession. - Higher Demand From Local Equity
However, we could see investors who pulled their money out of the stock market move toward real estate as a more stable investment, which could stabilize prices and/or prevent a major decline of property values.
If you’re thinking of investing in real estate during this time, be conservative with your offers and income projections.
“The bottom line is that there is tremendous uncertainty in various markets, including real estate and housing. Be conservative when you buy and have processes in place to deal with the virus if it becomes an issue in your property.”