The COVID-19 pandemic has turned the world upside down. From crashing the stock market to shutting down businesses and increasing the unemployment rate, this pandemic is influencing the economy to rush towards recession quicker than ever. And when the economy is on the verge of a recession period, would it be wise to buy or sell a piece of real estate right at this moment?
No, it wouldn’t be. Below, I have discussed in detail why I think it’s not a good time to invest in or sell real estate.
3 Reasons Why You Shouldn’t Buy or Sell Real Estate Now
1. The Downfall in Business Has an Effect on Buying Abilities
COVID-19 pandemic has forced people to close their businesses. Closure of big businesses not only affected the business owners, but it also wiped out the gains of the stock market. And the combination of these has a great impact on people’s income. Earnings reduced by several notches, which in turn, greatly affected their buying power.
When this is the situation, having money in the bank is much safer than to invest it in buying a new property. The main reason is that you cannot predict the future and you also don’t know if you can liquidate the property in times of your need because of the economic situation the World is going through.
On the other hand, as the demand for houses and properties is going downwards because of a lack of buying power, the prices of houses might as well go down with the demand. Because of a reduction in the value, I would suggest you to not sell your home at this time of the pandemic. Wait for this to be over.
2. You Cannot Visit the Property
As you cannot visit a property and see it yourself because of the ongoing pandemic, it would be wise not to invest in it. While some buyers buy a piece of property without seeing it in person, I recommend not practicing this. Before buying a house, walk through it, feel its vibe, envision yourself living here before making any final call.
The reason I discourage buying a house or property without seeing it in person is that professionally taken photos can be deceiving. And it would be really foolish of yourself if you spend hundreds of thousands of dollars or more without even having an “up close and personal” look at the house.
3. Unemployment Hits a New High
As an effect of big business houses shutting down, the unemployment rate in the US has increased unexpectedly as thousands of people lost their jobs. And according to an estimate by the National Restaurant Association, an additional 7 million people are likely to get sacked from their job in the next three months. When you don’t have a job, you have no income, and when there is no cash inflow, how will you pay for a house? Because of a lack of income and an unsure future, it is not the right time to invest in real estate.
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