The cherry blossom trees are beginning to bloom and the weather is warming up in the Washington, D.C. metropolitan area. Springtime is generally the time D.C.’s housing market hits a high. How will COVID-19, more commonly known as coronavirus, affect the market?
The two main concerns Americans have right now are health and the economy. Schools are closed and places of business have shut their doors and many may never reopen. But what does that really mean for the housing market? And although a recession would have catastrophic consequences for our economy, historically speaking the housing market isn’t closely aligned with the ebbs and flows of the stock market, not including the housing market crash of 2008, which was unlike our current predicament. The 2008 recession was led by real estate that lasted 18 months. Although we are likely in a recession right now, it is too early to see what kind of effect it will have on home prices.
D.C. market stronger than other cities
It is looking like the greater metropolitan D.C. area may get through this pandemic in better shape than many other areas of the country due to our unique local economy. Local Realtors are reporting requests for showings and listings. This is most likely due to the housing shortage D.C. is facing. D.C. has faced a shortage of housing for years. The people in this area are in need of housing and the coronavirus is not eliminating that demand. The lack of inventory is the reason D.C.-area homes are expensive and coming into spring 2020, many expected record sales prices throughout the region.
This housing shortage isn’t expected to go away anytime soon, even with our current pandemic. The nation’s capital and its contracted companies alone employ thousands of people, many essential with work-from-home capacity. Because of the federal government and internet-based companies in the D.C. area, when the stock market falls it doesn’t hit quite as hard in D.C. According to Clint Mann, Urban Pace’s president of sales and marketing, new home sales are trending to beat projections. Just last weekend, eNvy, a new condo development in the city’s Ballpark District, received more interested buyers than it has in all of 2020. This may be due to a younger population interested in purchasing a condominium and their belief they will not get sick from the virus. Regardless of our current situation, this is not a city where people are rushing to get out. In fact, it is quite the opposite. People are trying to get into the D.C. greater metropolitan area.
Should I enter the market?
We have known D.C. to be a seller’s market for quite some time. Will it continue to be? That is impossible to predict at this uncertain time, but there is a chance that it will continue. Much of this is dependent upon mortgage rates. Right now they are up, down, and then up again due to our uncertain situation. People are asking, “should I buy a house?” “Should I sell my house?” COVID-19 is terrifying, there is no question about that. However, anyone entering the housing market may find themselves with the benefit of low rates and less competition. If you have to have to sell a home, you will very likely find a willing buyer.
If you spend any time at all online or watching the news you will see news reports that will tell you America is on its way to another recession and other reports predicting everything will level off and we will survive this pandemic and economic crisis just fine.
You need to determine why you are selling or buying a home. Pay attention to national and local trends. We at Glass House have helped several buyers and sellers during this time and each situation is unique. We have our finger on the pulse of the local market and are well equipped to help you determine whether buying or selling is right for you.
Khalil Alexander El-Ghoul is principal broker with Glass House Real Estate. Reach him at email@example.com or 571-235-4821.