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The world is under great stress dealing with the fear of Coronavirus. In the past, we have seen a pattern of outcomes to our economy when these types of fears are instilled in our communities. For instance, in 2009 with the H1N1 swine flu, the virus lasted about 17 months globally and everyone was experiencing distress from the 2008 financial crisis. Senior Account Executive Jose Salcedo points out how history proves that both the virus and crisis played large parts in delaying the economic recovery, including contributing to the softer housing demand and activity at the time.
Ultimately, these types of cases translate into lower consumer confidence and greatly affect the stock market, which we are already seeing today with COVID-19. We are anticipating the impact COVID-19 will have on the housing market as consumers wait to react. During the H1N1 swine flu, the housing market dropped rates only a month after the onset. In addition to rates being lowered, existing home sales had dropped significantly. Although low rates are typically attractive and often drive the housing market, the market remained quiet due to a significant decrease in consumer confidence. Sale prices stalled and declined, even after two years of the virus onset.
Now that our economy has recovered, we have seen steady growth, low unemployment and housing markets boom across the nation. Today’s great demand in housing puts consumers and investors in a very different scenario than during the swine flu outbreak. Coronavirus has hit at a time where the housing market is struggling to meet demand.
Using recent history to tentatively predict what could happen with the COVID-19, consumer confidence will decline as fear and toilet paper stashes continue to grow. While we all hope this is a short-lived pandemic, we can assume that housing activity is likely to follow the current decelerating. So in the short-term with lowered rates and high purchasing power, investors are leaving fear in the dust and are able to acquire steady cash-flow investment properties. And with consumers shying away from the market, Jose suggests all investors should be ready to do immediate refinances to position themselves in a place to buy when they come across an investment-worthy property.
If you’re a stock investor, you know how volatile the market is, and you’re no stranger to the market drops causing more trading that essentially will lead to losses. Maybe it’s time to redirect some of your capital into a greater long-term ROI and join the other investors who have left fear in the dust!
Do not hesitate to reach out and contact your designated Account Executive for more Visio Lending updates. We are conducting business as usual and are equipped with company-wide measures to implement to continue delivering you fast, simple and dependable solutions.