Anyone who is on this planet knows that COVID-19 has created a virtual economic slow-down across the globe. Everyone and every nation can help stop its spread. You know as well as I do, we will conquer this virus and our economy will begin to recover and it is a long-term process. It’s not going to happen overnight. However, one interesting little piece of this is in some areas the economic slowdown may cause some home values to take a modest dip over the short term. But this could be viewed as an opportunity. Just prior to the pandemic, the housing market was really, really hot and it actually still is in many areas like where I live in the Pacific Northwest. It was not, and it still is not uncommon to see multiple offers on the same home.
Sales were at their best levels in 13 years and every metric was favorable, and in many areas still really are very favorable. There’s simply so much more demand for homes than there are homes for sale. And the supply of homes will remain tight, simply due to population numbers, whether it’s household formation from births, from folks moving into the country, or actually other folks who maybe been having multigenerational housing and they’re deciding to split off.
So one of the things that’s going to be interesting is while we do understand that there may be a short term decline in some activity especially depending on your housing price, up in the upper end, we’re going to see that probably a little bit more. It can also provide just the right opportunity to provide a home purchase at a really good price.
During the economic recovery, it’s likely that housing is going to lead the way. There’s going to be a lot of pent up demand. We’ve had a lot of construction shutdown depending on what state you’re in, and that’s all going to ramp up and really get going. So, remember, home ownership is not a sprint. It is a marathon. It’s a long-term investment and the average length of stay in a home right now is 10 years. That’s much longer than it was when we hit the 2008, 2009 and 2010 recession. There’s also a really good chance that the purchase of a home today will result in a really happy outcome in the future for valuation purposes as you stay in that home.
If you have questions, let me know.