There’s an awful lot of doom and gloom in the news these days. However, as we navigate this global crisis, it’s crucial to keep a clear-eyed perspective and not let the psychological toll impair our judgement when forecasting what will happen in the real estate market. We are certainly in uncharted territory and have a long road ahead of us, but there are several reasons to be cautiously optimistic about what the future will bring for high-end home values.
Look to the Past
Since 1980, the U.S. economy has experienced its fair share of recessions, from the 1979 energy crisis to the financial crisis of 2008, but not one of them has lasted more than 18 months. While our immediate economic outlook may not be inspiring, it’s important to remember that this is a temporary storm that we will weather and come out on the other side.
This Is a Health Crisis
There is one major difference between our current situation and The Great Recession: this is not a financial crisis. While the housing and mortgage industries were at the center of the 2008 collapse, the banks are far better prepared to endure an economic downturn today and this is not a bubble bursting. When the country is able to re-open for business, there’s reason to believe that real estate can recover quickly.
Home has new Meaning
This one is true for everyone, but the impact it has may be particularly evident in the high-end sector in years to come. In the post-coronavirus world, we are going to have a deeper connection to our homes and, more than ever, view them as our safe haven. Because of this, luxury real estate will be a more highly valued asset that delivers comfort and peace of mind.
In the history of real estate, housing prices have ultimately only gone in one direction: up. Of course, we experience cycles and current indicators point toward a decline in prices in the short term, but property should be viewed as a long-term investment and we will see all-time highs again in the future.