Please NO HUGS

Many people are panicking over the Coronavirus (including some of my closest friends who are stockpiling masks, frozen food, and their favorite cosmetics produced in China.)

Being a self-admitted germaphobe who cringes at the idea of greeting someone with a hug, I feel I have a jump on knowing how to prevent the spread of germs. Germs aside, we cannot shake off the fear this virus is instilling. The stock market has dropped over 6% in the past few days. Maybe it is time to take a serious look at this virus. What does this mean for residential real estate? Here is my pass at this polarizing topic:

What effect can a “potential pandemic” have on residential real estate prices?

In a panic-driven environment, investors tend to pull money out of the stock market and pile into “safe” investments such as bonds. This drives up bond prices and drives down interest rates. For example; on January 1, 2020, 10-year Treasury yields were at 1.9%. Yesterday, February 26, 2020, they closed at 1.35%. 

When interest rates decline, mortgage rates tend to decline. More buyers can afford to borrow more money. More buyers correlate to more competition. End-users in NY will come covered in a hazmat suit to find the perfect Classic 7 apartment. The end-user New Yorker has growing confidence in the market of renovated homes bringing bidding wars, packed open houses, and limited days on the market. 

And what about the luxury market? The luxury market is struggling due to geopolitical concerns, oversupply, and lack of foreign capital. A struggling market signals opportunities.

To the end-user New Yorker; let me help you position yourself to obtain the perfect home and take advantage of lower interest rates today. To the investor; let’s talk strategy. Where do you want to position yourself in the real estate market? In a struggling luxury market, sellers often agree to a deal you may not otherwise get.