A number of clients have asked what effect world events, specifically the outbreak of the Coronavirus, really have on the local real estate market and if this will be a good year to make their move.
Here are a couple of things to consider:
Mortgage rates. Global instability often causes foreign investors to see U.S. Treasury Bonds as a safe place to park their money. As money flows into treasuries, the yield on those bonds decreases which, in turn, helps keep mortgage interest rates down. Right now, rates are expected to remain at or below 4%, but if worldwide economic conditions change, those rates could rise. As we don’t expect significant stability to return globally, buyers should have strong purchasing power throughout 2020.
Consumer confidence. Consumer confidence is an economic indicator that measures consumer optimism about the economy and their personal financial outlook, and turmoil in the world economy sometimes spooks investors here in the States. When that happens, we see what looks like instability on Wall Street; that affects consumer confidence negatively, oftentimes causing buyers to think twice about making a large purchase.
Historically, we also see a dip in consumer confidence in the fall of every presidential election year. While that measure has always increased post-election in November, the dip normally changes the timing of the real estate market in that we see spring markets start earlier, summer markets last longer and a lull in the fall. That trend is holding true this year. The early spring market is off to a strong start with multiple buyers vying for a small number of available homes.
While current mortgage rates and consumer confidence affect the market, conditions are always changing. As a professional Realtor and part of the Long & Foster family, I stay updated on what’s happening, so I can best support all my clients and prospective buyers and sellers—just like you.
If you’re ready to make a move this year and want to know how to get started, let me know.