It is impossible to turn on the television, listen to SiriusXM or have a pleasant conversation in the supermarket without hearing the word “Coronavirus’ burst forth like a bright light during a solid two o’clock a.m. REM cycle. With the “C” subject so annoyingly omnipresent, one has to wonder if this insatiable virus will extend its reach well beyond cruise ships, self-inviting into the U.S. housing market.
Unfortunately, such concerns are valid, especially for higher-end markets. Here’s the problem: Our beloved, well-known investment metropoles have hit a brick wall. In addition, China is a global supplier and manufacturing entity and Corona is hitting where it hurts. As 80K+ cases of Coronavirus have been reported in China alone, it stands to reason that Asian real estate entrepreneurs are under mandatory lockdown. In other words, they are not free to leave home in order to invest in U.S. high-ticket zip code real estate such as NYC. As a result, the otherwise mind-blowingly, fast-paced U.S. luxury real estate markets have been transformed into a very slow-moving, perhaps arthritic, a herd of turtles.
How does this affect Jacksonville? Before you start composing your last will and testament, you should know that it is highly unlikely we will face another housing crisis such as we survived in 2008-2009. Now that you have begun to breathe again, here is the bottom line:
1. Jacksonville’s big-ticket zip codes are feeling the effects of the broader market as homes face a median sale price of $275,000. In other words, if your home is worth more than that, you would be wise to contact an expert in order to discuss the possibility of selling sooner rather than later. Your return depends on it!
2. Yesterday’s stock market plummet has created quite the nervous buzz. Suddenly, the lake house purchase has been shoved to the back burner until the market either turns itself back around or someone wins the Powerball.
3. Coronavirus, unfortunately, is doing its best to infiltrate via attempts to disrupt global supply lines, fast-tracking its way through Wall Street, decreasing the viability of well-known corporations by diminishing earnings. Needless to say, Americans who still have something worth selling have relinquished their stocks in exchange for bonds, thus driving up bond worth, potentially tampering with current comfortable mortgage rates.
4. For owners of homes with values of $275K and under, demand is on the uptick because there are more buyers than products. In addition, currently, low U.S. interest rates invite buyers who could not otherwise afford a mortgage to rise forth from the woodwork. Affordability is a great thing, however, those aforementioned bond purchases could eventually spike mortgage interest rates.
At the end of the day, not much has changed and we are maintaining our status quo: demand is still impressively high and inventory remains uncomfortably low.