How COV-19 will affect the Real Estate Market in Palm Beach County

by Jeff Lichtenstein – Broker and Owner of Echo Fine Properties

I think if you look a year out from today, the effect of the Coronavirus will be negligible.  If anything, it might cause an increase in prices with demand up a bit.  Here are some thoughts…..

COV-19 is a very real issue, but its long term effect on Real Estate (1 year out), will be negligible.  It has been upsetting supply chains (there will probably be some effect on new home materials and prices, although China is quickly coming back to work), which has had a direct impact on business and the markets. However, the demand for information and news, and the taking in of emotional information is always highest at the beginning.  People want genuine information and valid news outlets, tabloids, provocateurs and social media loons provide all of it, good and bad. This also scares people and fear can drive sales.

Then there is a sliding scale for information – and in X days, it will hit a Zenith and reverse itself. Eventually the next news story will take our minds off this and normalcy will occur. To put things in perspective….36,560 people died from car accidents in 2018.  That unfortunately fits into a 100 people a day and 4 deaths every hour on average. If every 15 minutes there was a story of the tragic death of poor Irving getting maimed at the roundabout and a news outlet did a feature story every 15 minutes on this, we would eventually tune it out. But people don’t stop driving and those driving accidents have zero effect on the housing market.

People who are purchasing homes are generally not in a weakened or sick state.  According to Dr. Anthony Fauici, Director of NIAID (National Institute of Allergy and Infectious Diseases), the highest group at risk is the very elderly or already very sick. These folks are usually not in the bracket of first-time home-buyers, in the workforce, new empty nesters, or active retires. These groups make up nearly all of the purchasing. We also might see less demand for overseas travel, cruising, and staying in colder climates during the winter months. That in turn would create more demand in our market.

Finally and most importantly, there aren’t fraudulent loans with crazy over speculation in the market place. That’s what occurred in 2006.  None of those ingredients are at play.  We have the opposite situation with historic low interest rates and an under-supply of homes – and will on a year to year basis going forward. The supply and demand forecast and long term growth is strong through 2045 and nothing is going to change that.

*Long term Projected Population Growth Palm Beach County per FDOT

https://www.wpbf.com/article/realtors-brace-as-coronavirus-cases-rise/31209365?src=app