Driven by an invisible organism, real estate marketing conditions in early 2020 are questionable – and questionable is rarely as good as steady and somewhat predictable.
When asking other real estate professionals about what they are experiencing , responses are mixed. One common thread is that the real estate market has changed. Professionals don’t seem to agree on either current conditions or where the market is headed.
My personal experience has been that, initially, the most common client reaction was to pump the brakes on real estate activities until the course of this virus becomes a little more predictable. This is still the case today, with a few exceptions.
Business as Usual or Fundamental Shift?
There is a segment of our brokerage pipeline that seems to be moving through this epic event in the spirit of business as usual. People in this camp seem less concerned about the long range socio-economic conditions and are intent to go on with their pre-virus plans.
A significant number of transactions cancelled almost immediately, and for a variety of reasons. The most common concern voiced among this group centered on the economic impact of controlling the spread of the corona virus. Many believe real estate values are destined to recede once the economy re-opens.
Another group of client transactions has paused due to the inability to relocate. Some locales have allegedly implemented quarantine standards which do not allow for people to move freely between states and counties. Although this condition will be relatively short lived, the lasting impact could change the course of many people’s lives, as many people may choose to explore other options while on pause.
Long Term Outcomes
As for the future of the real estate market, my feeling (guess) is that outcomes will vary regionally and by socio-economic class. In states such as New York, New Jersey, Louisiana, and Michigan, the economic impact could last for years. Other states, such as California, Arizona, Utah, and many others, pent up demand for our transient populations may show early signs of a return to slow and steady growth, followed by activity which may be best described as seeking a punctuated equilibrium: meaning a series of alternating growth spurts. However, looming in the shadows is the outside chance of a deep recession. My belief is that this is a long shot, due to the fact that the Federal government has the ability to create monetary stimulus like no other country; a lesson learned from the 2008 economic meltdown.
I also believe the real estate markets throughout the country will be redefined by existential motivations more than the limitations of economics. One example is the very real possibility of an increase in “urban flight” – a migration of people moving to more rural locations. The ability and desire of people to work remotely could certainly facilitate this trend.
Downsizing baby boomers could support another trend; less is more, meaning less obligations on time and fewer financial commitments translate into a more meaningful and fulfilling lifestyle.
The socio-economic demands on America’s youth require a high degree of adaptability. Today’s millennial population is very transient and apparently intent on remaining nimble. Consequently, an entire generation’s timeline for settling down appears to be recast much further into the future than at any time in our country’s history.
Over the past two decades, we are seeing how America’s unprecedented diversity is creating a variety of independent real estate markets based on regional factors, fractured socio-economic class, and a new world order driven by technology and information bringing people together through communication, yet distancing people through economic resources. In other words, the global market promises to be full of surprises!
Please contact us at Red Hawk Realty for further information or to assistance with any of your real estate needs. In this changing time, we remain steady.