Like many of you, I’ve spent the last 4 weeks trying to gather knowledge and opinions on how exactly the Covid-19 directly impacts me and those I care about. Specifically, I’ve spent a lot of time researching the impact on our work here at LEAGUE Real Estate. Sources are endless. Whether you’re searching for optimism or doomsday predictions you can certainly find both. But what’s really difficult is to narrow down how this crisis will affect you individually. Most studies and projections are linked to large industries or the economy as a whole, but what about Fort Worth? What about your house?
March 2020: Before and After
Prior to the first week of March the Fort Worth housing market was vibrant and busy. Just as the last few years, our market still had a shortage of available homes, specifically in the price points under $400,000. Good news for sellers. On the flip side, mortgage interest rates had held steady below 5% year over year. These low rates allowed buyers to stretch their budgets and still purchase homes with ever growing price points. In short, our market, like our city, was healthy. It was thriving. Then March came, and along with it social distancing, lock downs and school cancellations. The Fort Worth housing market wasn’t immune and we’ve experienced disruptions and slowdowns over the past month. I do believe we are looking at better days ahead. Unlike a financial driven crisis (See 2009-2010), we are in what I’ve heard being called an episodic crisis (see 9/11). Every industry and business are affected by this episode, but none were the root cause of it. Like so many others the real estate market in Fort Worth was collateral damage.
Like An Aircraft Carrier
Why is an episodic crisis better for our market? It means our industry wasn’t sick to begin with. This was an external injury. Once we are healed, our health should be similar to what it was. Will it be exactly the same? No. But are we looking at years of recovery ahead? Unlikely. In fact, many economists believe that real estate will be the among the least affected industries across the board. By nature, real estate is illiquid. It’s not like a stock or cash that can easily be converted into something else. Buying and selling it takes time and effort. Real estate markets can’t fluctuate wildly like the stock market does. It just can’t change hands that fast. Thus, there’s an old saying that “real estate always trails the market.” Some markets are jet skis, real estate is an aircraft carrier. This slowness to shift should work to our benefit in a short term episodic slowdown. We just can’t fluctuate like other segments do.
The Best Is Yet To Come
Many economic indicators point directly to real estate (housing in particular) coming out really strong in a post lockdown economy. Most financial experts expect interest rates to be at or near historic lows throughout 2020, allowing home buyers to have more purchasing power. Matching low rates with months of pent up demand from potential buyers is a recipe for market strength. That’s good news for the whole country. The great news for us Texans is our market is supported by tremendous job growth in the region. Even taking into account the job losses due to the current lockdown, the North Texas job market is still one of the strongest in the nation. Our ongoing job growth equals higher wages and demand in housing. As long as the lockdown doesn’t jeopardize long-term employment, we expect these factors to lead to a quick recovery for the North Texas housing market.
Your Common Quarantine Questions:
Are people still buying and selling homes?
Yes they are. Real estate as an industry is considered an essential business. While there are challenges when it comes to protecting people’s health and safety, a little creativity and safety protocol can go a long way. The housing market was strong before the outbreak and will very likely be strong after. Even with the challenges, people still want to own real estate in Fort Worth and the surrounding areas.
Why is real estate considered an essential business?
Housing at its base form is a utility. People need shelter. So, as with home construction and remodeling, the residential real estate business is deemed an essential need and must be maintained to prevent additional economic and social challenges.
I’d really like to buy a house in the next month or two but is that allowed and is it safe?
It is allowed and, with the necessary precautions, it can definitely be safe. Agents, sellers and vendors are all taking every precaution to ensure that safety is paramount. With diligence and coordination we aim to keep in-person contact points to an absolute minimum while you can still carry on with your house hunt.
I was planning on putting my house on the market soon, but is that safe or wise right now?
This would depend on the current dynamics of your market. In many areas we’re seeing very low supply and a lack of options for willing and eager buyers. This could mean that it’s a great time to list since competition for those who need to buy should be strong. I would recommend consulting with an agent to help guide and advise you through your specific situation, weighing the pros and cons of listing now. A good agent won’t pressure you to sell now but will help you make the right decision for your long-term wellbeing.
How can I visit a home, have a home inspected, and sign closing papers when there’s a shelter-in-place order?
Real estate business falls under the state’s essential business category, so you are certainly allowed to do all of these things during the shelter-in-place order. But the industry has also done an amazing job flexing to the current circumstances. In a matter of days we instituted curbside and video closings, 3D tours and virtual walkthroughs, and set up protocols to minimize contact and the spread of germs.
While we don’t know how long this crisis will last, the good news is that it won’t last forever! Thankfully, we’ve had a strong foundation and a thriving real estate market. This pandemic, while ugly and challenging for us all, will not stop us from serving. We are coming up with creative solutions to meet the needs of our clients, whether buying or selling. We are here to support the long term well being of our community. If we can serve you or answer further questions, don’t hesitate to call.
~ Matt Lewis, Broker