There is a lot of uncertainty surrounding the recent outbreak of the coronavirus. Governments scramble to implement measures to contain it. Scientists work around the clock to create a vaccine. Yet no one really knows how wide spread or critical this outbreak will be or ultimately how it will affect the economy, both locally and globally.
What we do know is that in China, the world’s second largest economy, production has dropped off significantly and supply chains have been severely disrupted. Decreased demand for oil caused the largest oil crash in 30 years. The stock market is experiencing some of its biggest losses in decades. On a recent Monday, the S&P 500 fell by 7.7%, blowing through the first circuit-breaker level that it tripped minutes after the opening bell.
In an effort to stimulate the economy, interest rates have been cut to historic lows. Low interest rates generally incentivize buyers and investors to make purchases, including real estate. While the coronavirus may deter some home buyers from shopping, there are plenty of others who are happy to take advantage of the boost in their spending power. From new buyers seeking their first home to international investors eager to acquire property in the U.S., the early spring market is already experiencing a flurry of activity.
In Cincinnati, during the first week of March, according to the CincyMLS, 363 homes were sold with an average selling price of $242,068. The median number of days on market was only 12. By comparison, during the same week a year ago, there were 310 homes sold with an average selling price of $213,846. The median number of days on market was nearly double, at 22.
A number of economists and financial experts expect the commercial real estate sector to be far more vulnerable to the economic impacts caused by the coronavirus epidemic than the residential sector. According to a recent article from millionacres.com, “in the event of a full-blown outbreak here in the U.S., commercial real estate (CRE) would be the hardest hit. Production and economic activity will slow because people will likely stay indoors, lowering consumer spending. Default rates in CRE loans would increase, and production and development would decline.”
Regardless of what the future holds, both buyers and seller benefit from having a knowledgeable, experienced realtor guide them through the often complex process. You can rely on our agents to expertly navigate the most challenging market conditions. Please don’t hesitate to reach out to any of them if you would like to know more about the current market conditions.