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HOW DOES CORONAVIRUS AFFECT THE REAL ESTATE SECTOR?

Many homeowners have their homes for sale, and they are worried about what will happen once this COVID-19 crisis ends. Will prices drop? Will remain? Will it be time to buy? Will we return to a real estate crisis? Here we tell you everything you need to know.

 

HOW DOES CORONAVIRUS AFFECT THE REAL ESTATE SECTOR?

 

It is a fact that right now we are in a crisis. In fact, it is something historical that the entire world has been stopped by this coronavirus that is testing us.

coronavirus 1And what will happen to the real estate sector? It is something that many people ask, mainly homeowners who had their house for sale, and who are concerned about what will happen once this confinement is over and we can reopen the business and move freely again.

If you see statistics and other articles of this type, you will see that in all they say that sales this year 2020 are going to drop heavily, etc. It is obvious that they are going to go down, because during this time of confinement the real estate market is practically stopped throughout Spain. Therefore, obviously the annual number of sales will drop compared to other years.

However, in this article we focus on whether this will affect you, as a seller or buyer, when this confinement goes away.

 

SELLERS

For selling owners, this COVID-19 virus should not significantly affect the selling price as we are currently not in any bubble and market prices are real. At the moment, if the period of confinement is met and it is not prolonged much more in time, obviously the market will drop a little, but we are not expecting shocks or crises as strong as the one we have been through since 2008.

There are experts who say that the seller should not be affected in the short term, unless this confinement continues for months and generates a lot of fear in society, which we all hope will not happen.

However, it is true that sellers will have to be a little more patient, because the market will be more unstable and selling your home will probably take a little longer.

 

BUYERS

coronavirus 2Is it time to buy? As you may already know, crises and difficult times are the moments to take advantage of and buy. Therefore, the answer is YES; when this coronavirus ends, it will be a good time to buy if you have liquidity, because unfortunately, there will be many people who will need money for having had to close their business or for being fired.

In addition, there will be people who will be very afraid and uncertain about what will come next, and will prefer to sell fast and for that they will have to put interesting sale prices.

On the other hand, it will also be a great time to invest in homes to rent, since after stages of uncertainty many people do not dare to take the step of buying a home and prefer to rent for a long period of time.

 

WHAT IS OUR ADVICE FOR SELLERS?

If you plan to sell your home, sell it. Do not look at how the situation is or wait more years in case the house prices go up. Find a trusted agent in your area, who can advise you well on the sale price and sell it.

coronavirus 3The truth is that prices nowadays are very stabilized, and no major changes are expected in the near future. Forget about those people who tell you to wait 5 years and prices will go up a lot again. In recent years, prices have risen very slowly and mainly in large cities. But in towns and places with less population, prices have risen very little.

What will happen on the next years? No one knows, but miracles surely not. The bubble that we lived until reaching that fateful 2008 we do not know if one day we will see it again; because it was a real madness; also caused by banks giving prohibitive amounts of money to everyone, which we don't think will ever happen again.

 

WHAT IS OUR ADVICE FOR BUYERS?

As we have previously commented, current prices are real, they are not a bubble like before 2008, so you do not have to fear such a huge reduction as it happened then, that some properties were devalued up to half price.

What you buy today or in the coming months, will surely be at its market price, and as the months and years go by it should be stabilized or go up little by little. We find it difficult to see a scenario in which prices are reduced much more than they are today, since the reason why buildings are not built in small and medium-sized populations is precisely because they do not turn out profitable when it comes to selling them. That is a fact that indicates that current prices are not high at all, but even slightly below where they should be.

So, before this COVID-19, were you thinking about buying a home? Are you in a favorable personal and work situation to do it? If so, you have nothing to fear, make up your mind and buy the home you are looking for.

 

And you, what do you think? Do you think what is said in this article makes sense? Do you think differently?

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