homes look their best in the dirty grays of late winter, which is, in part, why homebuying season coincides with the arrival of spring. This year, however, the crocuses that can make a house look that much nicer are showing up alongside the less reassuring news of a virus circling the globe.
The spread of COVID-19—the disease caused by the novel coronavirus—was officially declared a pandemic by the World Health Organization on March 11. It’s already claimed more than 83,000 lives worldwide. Shelter-in-place orders have been issued for cities across the country and almost 10 million Americans have filed for unemployment since the outbreak of the pandemic.
If you’re already in the market for a house, all the uncertainty might have you worried about the housing market. Will COVID-19 cause housing to collapse, as it did during the financial crisis in 2008?
Historically low inventory and rock-bottom mortgage rates would normally set the stage for a highly competitive homebuying season. While recessions normally have only a minor effect on the housing market, the coronavirus is making life and markets anything but normal.
Zillow conducted a study on housing during previous pandemics and concluded that while home sales dropped dramatically during an outbreak, home prices stayed about the same or suffered a slight decrease. This makes intuitive sense because it’s harder for prices to change when there are few transactions. In short, previous pandemics have simply put the housing market on pause.
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