- The Dow dropped more than 11% the last week in February and another 800 points the first Tuesday in March
- The S&P 500 had the worst day since 2011 and the worst week since 2008 in the last days of February 2020
- The coronavirus stock selloffs included real estate stocks
Warnings that call the coronavirus and its spread a “significant disruptor” and that “this could be bad” from anonymous US officials are coinciding with real estate agents canceling events and modifying contracts. Clearly, there is growing anxiety in the housing market.
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The temporary travel ban has put some deals on hold and, certainly in the short-term (the next 3 months), many potential homebuyers and sellers are watching on the sidelines.
The trade war had already dampened plans of many Chinese buyers to purchase US residential real estate. Xiang Jill Ji, an agent with Douglas Elliman in New York, is already looking to the future for those plans to resurface in coming months as effects from the coronavirus subside.
Ji said, “Chinese investors have future goals for their families,” said Ji, “and an important part of those goals is owning US real estate. People think ‘In the next few years, my children will come here to study and they will need a place to live.’ I don’t think that is going to change or be overshadowed by this pandemic.”
Others in finance are not quite as sanguine. Gregory Faranello, the head of US rate trading with AmeriVetSecurities, said, “This (the coronavirus) is a big deal…If and when this flows into the US, we could be in trouble because, let’s face it, the US consumer is what’s holding this thing (the economy) together.”
David Kostin, the chief US equity strategist with Goldman Sachs, said, “US companies will generate NO earnings growth in 2020. Our reduced profit forecasts reflect the severe decline in Chinese economic activity in Q1 2020, lower end-demand for US exporters, disruption to the supply chain for many US firms, a slowdown in US economic activity and elevated business uncertainty.”
Even the Federal Reserve’s surprise rate cut of 50 basis points the first week of March did little to calm markets. Most definitely, all markets including the housing market are watching events unfold day-by-day if not hour-by-hour.
Thanks to Inman’s Jim Dalrymple for source data.