How Will The COVID-19 Crisis Affect Your Home Value?
The COVID-19 crisis has impacted almost every area of our lives, and there’s no way to tell for certain what the lasting effects will be. Naturally, the uncertainty of the future creates a lot of worry in our lives, including the housing market and what we should prepare for.
Are home prices going to go up or down?
Will there be a major market adjustment or are things going to hold steady?
Will you be able to find a new home if you sell your old one?
Will you be able to sell your old house if you find a new home you fall in love with?
These are the questions racing through everyone’s minds. While we can’t make any definite statements, these are the ways that we think the COVID-19 crisis is likely to affect your home’s value.
Trying to Sell?
If you just started trying to sell your home before the crisis hit or you’ve been thinking about selling in the upcoming months, you’re probably going to do just fine. Sure, there won’t be as many buyers out in spring as there usually are, but the buyers who are out there are likely to be highly motivated.
However, COVID-19 will definitely affect the way you sell your home. You’re not going to be able to hold an open house, and it might take a bit longer to sell than it would in a booming market. At this point, though, there’s no reason to worry that your home is going to lose a lot of value.
Just Bought Your Home?
Everyone knows that the key to real estate is “buy low and sell high”. If you just bought your home, you’re probably a little nervous that you made a big mistake. What if there’s a big dip in the market and you’re stuck paying more for your home than it’s worth?
Again, this is a situation where you’re probably going to be just fine in the long run. That mantra is meant for people who are looking to make a lot of money in real estate. It doesn’t apply as broadly to people who are buying their dream home to live in. Most likely, you bought this home planning to stay in it for least 10 years, and any minor damage to the real estate market done by the coronavirus is likely to have been adjusted by then.
Keep in mind, the real estate market is a lot more stable than other markets. Speaking of…
Less Activity = Less Volatility
Finally, one of the best things about the real estate market is that it’s simply less volatile than other financial markets. The most likely scenario is that fewer people will be looking to buy and sell homes. This doesn’t dramatically change the market for homes. There will always be peaks and valleys in our economy, with the real estate market rebounding soon after those low points. There’s a fairly good chance that we can expect the market to follow a similar pattern this time around.
Reduced Mortgage Rates
In an effort to head off any major damage from COVID-19, the Canadian government has been lowering interest rates. Some people are using this opportunity to refinance their mortgages to make them more affordable, especially if they’ve been experiencing some financial hardships.
However, these lower interest rates also mean that it’s a good time to buy a home! Anyone who’s been saving up their down payment to get ready to buy a home is going to be in a good position. Lower interest rates mean you can afford to buy a bigger home. This should help keep home prices fairly steady for the duration of the crisis.
The COVID-19 crisis has definitely created a lot of uncertainty in the world. We don’t know when it’s going to end or what’s going to happen. However, we think there’s a good chance you don’t need to worry much about the value of your home. When you’re ready to sell, you’ll be able to get what it’s worth.
Photo credits: depositphotos.com
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