It was inevitable I suppose, what with the nightly news of Coronavirus and its global spread . . . that Real Estate markets might soon feel the effect. Now that it's come ashore in the U.S., Buyers and Sellers are anxiously wondering if home values are set to finally correct??? And to this appropriate inquiry, I can only reply, "I don't know." (Wouldn't it be great if I did?)
And while it's unclear why Coronavirus has created more media concern than the flu which kills approximately 56,000 people a year and hospitalizes more than 200,000, according to the CDC, there's no doubt that Coronavirus has not only, sadly, resulted in the loss of lives, it has essentially halted travel, caused widespread panic, resulted in steep-market declines, and has put a real crimp in industries worldwide. Talk about a wet blanket!
So while Real Estate might not yet escape the sharp decline we are witnessing in many other sectors, it's important to note that real estate values tend to be driven by supply and demand, coupled with the prevailing interest rates - not the stock market. (BTW, interest rates have never been lower.) In fact, there are savvy investors who will now swiftly move from stocks to real estate, strategically transferring their dollars into something far more tangible and real. On the other hand, if you were counting on your company's IPO to vest high this month, you may be putting off a home purchase in the near future.
Still, even adjusting for the untimely loss of wealth, the Bay Area continues to offer too little supply to meet demand, especially here in the East Bay where housing stock has been woefully inadequate for years. Consequently, both the Saturday and Sunday Opens Sarah and I hosted last weekend were incredibly busy and well attended, in spite of the fact that they represented opposite ends of the affordability spectrum. Moreover, the follow-up in disclosure requests as well as the private showings on these properties has remained steady throughout the week. In short, virus or no . . . people still need a place to hang their hats.
Which isn't to say that financial choices aren't going to be made; they undoubtedly will, but those choices will likely now prioritize what's "negotiable" from what is not. In my experience, housing for our families falls into the "non-negotiable" category, while travel and leisure are easily delayed. (The airlines and hotels are, unfortunately, taking HUGE hits.) Having been a family that happily traded private-school education for Piedmont public schools, private-school tuition may also fall into the category of "Maybe we should consider another course of action," which for those property owners with access to good public schools may spell decidedly good news.
Still, if the financial meltdown of 2008 taught us anything, it's that even though Piedmont was not shielded from a correction in the marketplace, (Corrections are typically brought on by fear.) it fell less and bounced back faster and stronger than many other cities across California and the greater Bay Area. In my opinion, that was a result of highly-coveted public schools, a strong sense of community, excellent city services and beautifully-manicured streets. In other words, Piedmont is a fairly special place to live.
So stay calm, stay the course, stay connected, and let's pray for everyone's health and wellbeing. Together (always together), we will weather the storm.
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Julie Gardner, has been writing The Perspective for 15 years and has published more than 500 essays. She is also a frequent contributor to the Sound Off column in the Real Estate section of The San Francisco Chronicle.