The corona virus, a deadly disease originating in China and spreading worldwide, has played a central role in the recent news. Can a health crisis impact? current property trends? Experts are considering how Coronavirus can affect the US real estate market.
Braking the luxury real estate market?
At that time, there were only 11 confirmed cases of coronavirus in the United States. According to Lawrence Yun, chief economist of the National Association of Realtors® (NAR), the Luxury real estate market already takes a hit. Many high-end properties on both coasts are bought by wealthy Chinese buyers worth $ 13.4 billion in NAR’s latest annual report.
In the short term, this could suppress an already sluggish luxury market that is defined as Real estate that sells for more than $ 1 million. Bay Area broker Amy Kong, elected president of the Asian Real Estate Association of America, reports less participation in open houses that are marketed to Asian buyers.
Interest rates in decline
China is the second largest economy in the world. Everything that affects the financial outlook affects the world. On January 30, 30-year fixed rate interest rates fell nine basis points to 3.51%. While lower interest rates could trigger an increase in buyers, sellers who increase list prices could negate the benefit.
What’s at the door
Yun makes a comparison between the coronavirus and severe acute respiratory syndrome (SARS) onset in the early 2000s. SARS had a negligible impact on U.S. real estate, but Chinese buyers weren’t as active back then. Fortunately, there is consensus that once the corona virus is under control, the market will function as usual.
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