Will The Coronavirus Cause a Crash Like 2008?
We quickly went from a housing market that we knew very well to one with a lot of uncertainty with how things will look in the future. Now, I don’t know about you, but when major events like this happen my mind jumps to the crash of 2008 because we all still remember very clearly how difficult those times were. My parents were one of the many families that had to foreclose on their home, and that is actually where my passion for real estate began. I wanted to help others to not end up in a situation where they were being taken advantage of, so it became my passion to learn anything and everything about real estate.
The housing market right now is very different than it was back then. In 2008 the market crash was caused by the actual housing entities. Loans were given to anyone and everyone whether or not they were able to afford the mortgage. Since then and until now the standards for giving out loans have remained conservative.
Appreciation of homes has also remained a lot more stable than it was before the crash. Additionally, we don’t have a huge surplus of inventory like we did in 2008, we are actually at the opposite end and have a shortage of available homes. The biggest difference is that prior to the market crash of 2008, people were refinancing their homes at a high rate and taking the money out which then made it impossible for them to make their monthly payments.
From 2005-2007 there was a total of $824 Billion dollars in refinancing compared to from 2017-2019 where there was just $232 Billion. All of these are huge differences in our current housing market compared to the 2008 market.
Now that we are coming up into the busy Spring real estate season, there are still many safe options for buyers and sellers that still need to or want to move in the near future.
- If you are selling your home, you can ask your agent to do a virtual house tour for interested buyers or host a virtual open house. You can still have showings as well, but just limit it to the number of people and have the agent be the one opening all the doors or cabinets.
- If you are a buyer, your agent can preview the homes for you and either face time you or send a video. If you’re really interested after that, then you can schedule an appointment to go see it. These methods have already been used widely by people relocating from out of state we are just now incorporating them into our local markets.
If you have any questions about whether you should sell your house or buy a house please reach out to me and I would more than happy to answer them and provide some guidance.