The effects of the recent outbreak on the real estate industry have been quite tremendous, for brokers, sellers, and buyers alike.
The novel coronavirus disease or COVID-19 is a respiratory disease carrying a virus known to spread all over the body and from one point of contact to another. This outbreak forced different countries across the globe to implement regional lockdowns and quarantines to help contain the virus.
This disease has greatly affected a number of industries, and real estate is one of those. Spring is typically the best time to buy or sell a real estate property. But because of the COVID-19, real estate operations and transactions have come to a halt. Here’s how COVID-19 is affecting the real estate market today:
Mortgage Interest Drop
With the recent outbreak, mortgage interests are surely expected to drop coming fall. So homebuyers are most likely to enter a mortgage interest-free fall. The last time a health risk made this kind of impact on the global economy was during the 2003 outbreak of severe acute respiratory syndrome or SARS. The only potential problem or issue here is that it could create a slippery slope where a lot more buyers enter the real estate market and try to get a good deal, which allows sellers to jack up their prices. Either way, real estate property rates are increasing exponentially, even without the effects of a global pandemic.
Virtual Trippings
Because of the outbreak, both national and local governments of different countries are forced to implement quarantine periods and lockdowns. In turn, residents are also forced to stay at home at all times, only going out if it’s a trip to the hospital, the grocery store, or the drugstore. With that, actual visits and tripping to real estate properties like homes or warehouse properties have gone digital. This is where augmented reality (AR) takes the spotlight.
Augmented reality (AR) is an evolving trend in the real estate industry. It allows buyers and sellers alike to save time and energy by taking the property into a digital realm. That way, you can take a quick inspection of the place, even at the comforts of your own home.
Closing Delays
Closing a deal during this crisis is definitely a hard feat. Whether a sale depends on the buyer seeing the property before signing on the agreement, or due process is required before officially closing sales, the impact of the COVID-19 could cause a significant delay in closing or even put a sudden halt on the deal in total.
Travel restrictions, self-isolation, home quarantine, and the general fear of the unknown are definitely leaving people sheltered in their homes until further notice. Hence, these kinds of actions, even if done in the minority, could create a temporary slowdown in an overall real estate transaction.
Wrapping Up
Though these times are hard, everyone must do whatever they can to help contain and control the virus. Amidst the growing concerns relating to COVID-19, many industries – particularly the real estate sector – have clearly come to a deadlock. Nevertheless, a dramatic drop in the number of the COVID-19 cases and a lockdown lift will surely push the market back up. While the sudden shift in the industry may seem alarming, the future may not be as bad as some people expect.
Author’s Bio: Angelo Castelda works as a contributor for a news magazine in Asia. On his free days, he likes to read books about the logistics industry and warehouse management. He also gets frequently invited to schools and universities to hold talks about the supply chain system and warehouse operations.
