San Diego Real Estate Market Pandemic
In just a month, our nation went from a stock market reaching all time highs and a very prosperous nation, to a nation entering what realistically looks like another Great Depression!
In two weeks ten million people went on unemployment. Our Government suspended April 15 Tax Day, put a moratorium on many rent payments and mortgage payments. We also saw what was anticipated to be a two week stay at home lockdown, almost immediately morph into a six-week remain at home and social distancing effort to flatten out the rising curve of infection, and so, not overload our healthcare system. Than we had the Government speedily pass what could easily be a $6 trillion dollar rescue bill.
San Diego Real Estate Market Pandemic
So, even though I have over three decades of residential real estate experience, most of it achieved here in San Diego California, if you’re expecting me to tell you definitively how the San Diego real estate market is going to come out of this unprecedented pandemic and economic calamity, not only can’t I give you the specific conclusion or even a well-informed possible Outlook, I cannot. Actually, I don’t believe there is any real estate professional who could with any certainty, tell you how this all plays out for the residential real estate market.
Certainly, at times like this, I think being optimistic is a priority. But, I don’t think being overly optimistic is prudent at this time. I believe, that if he gathered up 10 top economist and asked him the same question,”what do you think will be the effect on residential real estate as the economy emerges from our lockdown state,” will most assuredly get 10 different opinions each of which will most probably be backed up by very believable scenarios.
Obviously, which one of the 10 economic opinions will be the right one, will only be able to be determined perhaps a year or so after the economy starts to gear up again.
I think we all should understand that we are living through historic times, that will have profound and game changing impact not only on San Diego residential real estate, but real estate throughout the United States.
With that said, I think believing that the residential real estate market here in San Diego will come right back from what is sure to be a major impact, is just naïve. As I said in a prior article about the viruses effect on the real estate market, I believe here in Southern California and San Diego in particular, we will be cushioned to some degree from the negative impacts, because of our shortage of supply of affordable homes. Please understand I said cushioned from the impact not spared from it!
I’m sure for the many that believe that once we come out of this government mandated stay-at-home order things will start humming right along and/or just return to normal relatively quickly in the residential real estate market, all I can say is I really hope that your correct, but being a realist, I doubt that very much.
I do understand that mortgage rates are at extremely low, almost unheard of rates. But, who really cares what the mortgage rate is, if you are out of work or have been scared by the thought, perhaps for the first time ever, that you may not be certain of retaining your job and/or paying off the obligations that you built up over the shutdown?
Perhaps, you’re worried about what the economic cost of the government’s aid package will ultimately be! After all, the government can just not keep issuing or extending monetary incentives by just adding zeros to the national deficit! Will we be looking at some type of hyperinflation because of all this monetary expansion? Or, as some believe, is it possible that the economy will enter into deflation?
Sure, there is a third possibility, and that’s the possibility that we will see a solid and steady recovery for the economy, and in a few years just look back on this historic event as a speedbump in our social and economic history.
Let’s hope the outcome will be like a speedbump, obviously, this is the best scenario.
So, in conclusion, I hope everyone is staying safe during this challenging time. If you are not directly affected by the virus, I’d recommend that you stay aware of what is happening, but don’t let it overwhelm you. These are historic and uncertain times, but one thing that is certain, we will get past this!
This is just my interpretation, and I could be wrong so one should again do their own investigation and talk with your own legal and financial professionals.
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