As a novel coronavirus alters everyday life around the world, would-be homebuyers, many of them watching the punished and volatile stock market, are wondering whether today is the day to drop a down payment, or if it’s best to wait for this pandemic to blow over.
The outbreak of COVID-19, a disease spread by the coronavirus, could last until July or August, President Donald Trump said during a Monday afternoon press conference.
As investor speculation abounds, Ray Hill, a senior finance lecturer at Emory University’s Goizueta Business School, says prospective homebuyers might want to pump the brakes before writing checks.
“This is probably a good time to wait,” Hill tells Curbed Atlanta via email this week. “One reason is that a potential buyer might want to have more certainty about how their own financial situation will be affected.”
Hill is nodding to the blow the virus has dealt to the economy, especially to workers whose jobs have been most impacted by the widespread closures of brick-and-mortar businesses, such as food service employees.
“Another reason is that the pandemic will likely have a negative effect on real estate prices, at least in the short run,” he says.
Hill says he doesn’t see any “signs of weakness in the Atlanta real estate market yet,” but that, with the way virus-related disruptions are trending, there’s too much uncertainty on the horizon to guide investment predictions.
Joel McRae, an Atlanta REALTORS Association spokesperson, says local agents have “definitely seen a reduction in both buyer traffic and seller traffic.”
With mortgage rates dropping in response to coronavirus worries, “it’s definitely a sellers market,” McRae wrote in an email to Curbed.
McRae echoed Hill’s input regarding the stock market’s precarious nature and how it could impact the housing industry.
“Despite there being a sellers market, people are very leery of buying and making investments in homes and properties at the moment,” he says. “With the stock market in flux, a possible—or probable—recession looming over the country, and a whole lot of uncertainty in the air, I believe most people don’t know how to proceed.”
Realtors across metro Atlanta have also had to adapt to the coronavirus response: Many are cancelling open houses, requiring potential buyers to wash their hands before touring houses, and, in some cases, finding ways to show homes digitally, McRae says.
But with COVID-19 statistics updating by the hour, it’s impossible to prescribe wisdom to people concerned right now.
“We fully expect that the conversation surrounding [coronavirus] will be entirely different by the end of the week than it is today,” McRae says. “It’s difficult to tell how much the housing market will be affected until we’ve seen the full economic impact and implications that come along with it in the coming months.”
Additionally, as government officials grapple with how exactly to address widespread concerns of the viral disease, more potential shutdowns could be coming down the pike.
Should Georgia Gov. Brian Kemp or Atlanta Mayor Keisha Lance Bottoms enact statewide or citywide quarantines or curfews, “I assume that will put everything on hold,” Hill says of the real estate market.
Still, the professor adds: “Atlanta’s real estate market was relatively robust coming into this crisis, so there is no reason to think that the recovery will not be robust.”