Saturday, March 28, 2020

Five Takeaways - COVID-19 and the Los Angeles Real Estate and Mortgage Market

COVID 19 and Real Estate 2020

What Do We Know So Far About the Real Estate Market and Mortgages in 2020

We are all taught that history should be our guide as we head fearlessly into the future. Unfortunately, in 2020 there is precious little that we can look to for guidance, as so many things are clearly happening for the first time:
  • A World-wide pandemic, but in an era of advanced medicine and fast computers. If this were really the Spanish Flu, we could predict 200,000,000 dead and plan around that. But our technology will probably keep that number to 200,000 world wide. Just another bad flu season.
  • A shut down of economies around the world with no clear starting date for reopening. 
  • Real estate in LA at all time highs after running up for over 10 years. But interest rates are at historical lows, and inventory is almost non-existent. This set of data has been true for several years, but the statistics are even more extreme this year than in the past 10 years. 
  • Almost no new listings, no open houses, no shoppers, and deals collapsing. 
Some pundits are looking to 2008 as the comparison, but that was an economic collapse specifically associated with a housing bubble.

More realistic would be to look at the 911 terror attack and the related panic. The stock market recovered within two months. Because this crisis has a longer time of uncertainty and has a more direct impact on more people, the stock market is likely to remain depressed until the US is getting back to work. However, it wouldn't be shocking to see the Dow back to 30,000 by the end of 2020.

Housing is likely to follow a similar trend. Once the US starts back to work and folks relax about their future, shoppers will likely head to open houses again, and sellers will call agents to get their listings started. Timing? President Trump says Easter. Bill gates says end of May. Take your pick, but it seems likely that the country will be moving towards recovery during that period.

What to do now?

  1. If you are a seller, and you need to sell, put it on the market. But you are likely to get a lower price today than you will in June. If you don't need to sell today, wait until May to list. 
  2. If you are a buyer, there are probably some great deals out there. Interest rates are at historic lows, and this might be a great time to go bargain hunting. 
  3. You might want to refinance at this point. Four reasons to do so: Drop the interest rate on your current mortgage and lower your payments; take cash out to pay off higher interest loans, help your business, or remodel; Get rid of FHA or PMI which might save you $1000 or more per year; Change to a 15-year mortgage with very low rates.
  4. If you are going to sell right now, take your time to find a great realtor. You will want someone very aggressive who is using state-of-the-art methods like virtual tours. 
  5. If you need a mortgage for refinance or for a purchase, you'll need an outstanding lender at this time. The banks are overwhelmed with applications for refinance. Call Bill Rayman at 310-453-4016. He will take the time to walk you carefully through your choices and make sure you get the perfect loan for your needs in these unusual times. 
Bill Rayman - Guaranteed Rate
310-453-4016
Bill@rate.com
https://MortgageHelpLosAngeles.com

#covid-19 #pandemic #losangelesrealestate #economy #realestatemarket #mortgages #refinance

1 comment:

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