Coronavirus response: How will real estate markets respond?

The novel coronavirus that causes COVID-19 has upended many systems around the world, from stocks to tourism to the convention industry. With this uncertainty hanging over the market, how will real estate investors respond in the short term? What might occur on the broader horizon? As quickly as the new coronavirus crossed China’s borders, the impact on the financial markets has been almost as swift. Fearing a bear market, investors directed their capital reserves to the relative safety of the bond market, resulting in the largest one-week stock market drop since the 2008 financial crisis. The Dow just had its biggest crash since 1987. A special report from Marcus & Millichap points to recent history as an indicator for how long and how far-reaching this market correction might be—as well as the implications for the CRE sector. SARS, H1N1 and other recent pandemics also generated short-term market volatility. While it’s still too early to compare the full health impacts of COVID-19 with those strains, the markets stabilized in the range of three to six months on average during past events. In isolation from this new health scare, real estate supply and demand are largely in balance. It’s fair to assume that—barring a devolution into a far worse global health emergency—job creation and economic growth will both decelerate but remain positive. This should support real estate fundamentals and lead to a relatively stable outlook for the sector over the remainder of the year. Click to read more at