Buyers Leery of Future, Justified?

Some buyers seem to be a bit leery of the future with all the COVID-19, civil unrest, market volatility, and such some might think, :"of course they are!" But should they be, really? Perhaps, but this current situation we find ourselves in is more political than anything else. COVID-19 is a real threat, but governments are on it, taking precautions and things are at least stable for the moment on the health front. As for the civil unrest this will also settle down. Hopefully the people in government can turn to meaningful reforms to resolve these deep rooted problems and social conditions can start to heal. We have been down this road before.

Real Estate however is a commodity. Whether one rents or owns we all need a place to live. Real estate can weather the storms of health pandemics and even civil unrest. So long as our financial institutions are solvent and prepared to provide funding for development and loans for purchases the industry should be OK.

The inventory levels locally are still about as tight as they were right before the pandemic hit. As I have written several times over the last couple of months, listings are down and buyers are down in near equal numbers and that has left the market slower but steady on values. So long as the balance between buyers and sellers does not slip to far in favor of buyers the market should continue to be healthy. Economic conditions are not ideal, but they are still solvent and that means that buyers can buy with some confidence. Even if prices take a dip, which they could, owning real estate is still better than paying rent for the vast majority of people.

Buyers should bear in mind that during the last real estate crisis in 2009-2011, housing prices were low but rents skyrocketed. Once a buyer buys a house the "rent" ie. mortgage payment is fixed. No landlord to raise the rent. Should a buyer encounter difficulty with income, it is generally easier for a landlord to evict a tenant than it is a bank to foreclose. The decision to buy a house should not be put off due to fear of job loss or income reduction because that fear applies to renters and buyers alike.

The real estate market remains sound and the trend does not seem likely to change dramatically one way or the other in the short term.