Instant Reaction: Coronavirus, March 9, 2020

“The coronavirus is leading to fewer homebuyers searching in the marketplace, as well as some listings being delayed. In the latest flash survey, 11% of REALTORS® indicated a reduction in buyer traffic and 7% are reporting lower seller traffic when asked directly about the coronavirus impact on the market. Given that a home transaction is a major commitment, the uncertainties on how the economy will play out and the spread of the virus itself are barriers to homebuying and selling. The stock market crash is no doubt raising economic anxieties, while the coronavirus brings fear of contact with strangers. At the same time, the dramatic fall in interest rates may induce some potential buyers to take advantage of the better affordability conditions. It is too early to assess the likely impact as to whether lower interest rates can overcome the economic and health anxieties. But the survey is implying in the short-term at least that home sales will be chopped by around 10%, compared to what would have been the case, due to the spread of coronavirus.”