The month of March brought high levels of uncertainty to the world as the coronavirus continues to spread. As of March 16, 2020, the total number of global cases for coronavirus surpassed 170,000, including more than 6,500 fatalities. You can follow the virus’s impact here. Thankfully, a majority of those affected are expected to recover fully.
The spread of the Coronavirus or COVID-19 has impacted the worldwide economy as well — countries like Italy and Spain went into lockdown, the United States imposed a temporary ban on European travel, large sporting events and conventions were cancelled, and the housing market, from traditional to luxury has stalled.
Supreme Auctions would like to remind everyone to take preventative measures to remain healthy. Many Realtors and homeowners are taking extra precautions to disinfect their properties for open houses as well. If you are concerned about upcoming auction attendance or how the virus will impact the high-end home market, continue reading or call 888-660-6456 for auction updates.
The Impact of COVID-19 on the High-End Housing Market
From the moderately priced homes to those in the ultra-luxury tier, the housing market is feeling the impact of the virus. Numerous sellers at all price points are opting to cancel open houses or postpone the sale of their home. Lawrence Yun, chief economist for the National Association of Realtors®, explained Realtors reported 7% lower seller traffic.
An upcoming luxury real estate auction hosted by Supreme Auctions has been put on hold. The property is located in Ft. Lauderdale Florida and the auction set for March 21 is now expected to occur at a later date, providing both the Seller and potential Buyers the opportunity to take care off immediate daily concerns.
Beyond the cancellation of home sales, Yun also revealed that 11% of Realtors indicated a reduction in buyer traffic. In the luxury sector, international buyers are unable to be physically present to close transactions, in addition to the decline of interest in purchasing luxury real estate during a viral pandemic.
Expected Long-Term Impact of COVID-19 (Coronavirus)
List Globally offered their predictions of what could occur if the impact of the coronavirus is felt long-term. They believe there will be a surge in transactions after delayed purchases are completed and the interest in owning a second home will rise to help give peace of mind to international buyers.
Mansion Global predicts a decrease in property prices and international interest in numerous high-tier real estate markets if the pandemic continues.
Known Impacts on Major Markets
As of March 6, property prices in the UK were reported to be on the rise. Mansion Global predicts foreign investment will decline, thus negatively impacting property values and further halting new construction.
California is also affected by the virus. The California Association of Realtors predicts a decreased demand for luxury buyers and a potential decline of property values for homes listed on the traditional market.
The impact of the virus has not all been negative. Despite schools, bars, and restaurants being temporarily closed, Manhattan’s luxury market is still performing well. Mansion Global reported that buyers signed 21 contracts for Manhattan homes asking $4 million during the week of March 9-15. It is unknown if this trend will continue.
The housing market is beginning to experience lower mortgage rates after the Federal Reserve’s decision to cut its benchmark interest rate to zero. This move could shield the luxury real estate market by sustaining growth during this period of uncertainty. The lower mortgage rates could increase demand for refinancing and create more opportunities that entice buyers to continue shopping for high-end properties.
What is the Coronavirus?
Rendering of the coronavirus.
COVID-19 is a new strain of an old virus. Coronavirus itself is not new; it was discovered in the 1960s. However, this new strain spread before any research could be conducted on it. The lack of preventative measures or medical awareness prompted a worldwide response.
COVID-19 is a severe acute respiratory syndrome. Simply put, it is a virus that impacts your respiratory system and it has the potential to be severe. Not all causes are fatal and a majority that develop it are expected to recover.
It is also asymptomatic for the first 2-14 days of incubation. Medical professionals believe this is why the virus was able to go undetected until it was more widespread. Many infected individuals do not know they have the virus until symptoms develop. You do not need to have symptoms to be contagious. Once symptoms do develop, they include a fever, cough, and a shortness of breath.
To protect yourself, the Centers of Disease Control and Prevention recommends you do the following:
- Wash your hands often with soap and water for at least 20 seconds
- Use a hand sanitizer that contains at least 60% alcohol if soap and water are not readily available
- Avoid touching your eyes, nose, and mouth with unwashed hands
- Stay home if you are not feeling well
- Avoid crowded areas and cruises
If you believe you are sick with the virus, contact your healthcare providers immediately.