Well, I am quite sure you have seen the current effects of the coronavirus (unless your head is in the sand and you don’t watch TV or read, which I wouldn’t be surprised as to how many are clueless as what is really going on!) from China and its spread throughout other countries and its slow creep around the globe to our shores.
This is obviously an extremely serious and dangerous calamity the most serious of events in recent memory and the spread appears to be occurring and hasn’t slowed down. Hopefully, it will not have as great effect on the U.S. population going forward, but the present situation looks quite dire and challenging, due to the fact there is no vaccine, therefore no cure at this point in time.
However, at 3:49pm Tuesday, Feb 25 a report came over the newswires from CNBC and I quote:
“The coronavirus outbreak that’s shuttered commerce across China will likely become a global pandemic, a top U.S. health official said, adding that it’s just a matter of time before the outbreak starts spreading in the U.S. “Current global circumstances suggest it’s likely this virus will cause a pandemic,” Anne Schuchat, principal deputy director of the Centers for Disease Control and Prevention told reporters at a news briefing.”
“It’s not so much a question of if this will happen anymore, but rather more a question of when this will happen and how many people in this country will become infected and how many of those will develop the severe or more complicated disease,” she added.
Health and Human Services Secretary Alex Azar added: “We can’t hermetically seal off the United States.” Azar confirmed four new cases of the virus from repatriated cruise ship passengers, bringing the total in the U.S. to 57.
This is much more troubling since China has shut down so many manufacturing businesses that have a direct correlation to the U.S. economy as well as the global economy.
As I have read and heard in the past, when China sneezes, the rest of the world catches a cold which comes from the widely used saying dating back to Austrian politician Klemens von Metternich (1773–1859) who, at the time of Napoleon, penned the phrase “When Paris sneezes, Europe catches a cold.”
Economists and politicians have amended Metternich’s words to reflect America’s dominant role in global economics since the start of the Industrial Revolution. Now it is used in relation to China and its’ global economy.
Our stock market has lost several thousand points in just the last two days from its high of 29,557 on Feb. 15, 2020. If this continues, what will the effect be on real estate?
As the Chinese economy falters, having a direct and indirect effect on the U.S and other economies, real estate will be affected too! All products and manufactured goods from China have been reduced to a standstill and most sectors of the global economy have been affected.
So if this continues without a usable vaccine, when will the layoffs begin and multiply and have a tremendous impact on our economy as the business continues to slow due to lack of materials, products, and manufactured goods from China?
Real estate is an integral and major component to our productivity because some many items are purchased abroad, especially from our major partner, China with relation to the sale, investment, purchase, rental and leasing of residential and commercial properties. Stoves, washers, dryers, microwaves, air conditioners, building materials, and so many other commodities are related to real estate transactions, building, and development, renovations, repairs, etc. and when those items are not available, things slow down and worst could cause a beginning of a recession, but hopefully not, if a vaccine can be created and immediately be dispersed to all countries, especially where this potential pandemic began in Wuhan, China.
Many open-air seafood markets were selling live and freshly slaughtered animals that were sold to the public, whereby easily transferring the virus to humans who had worked there and the public at large. However, a study published in The Lancet on Jan. 30, 2020, suspects that some scientists believe it originally had been transferred from bats.
An antidote vaccine is being worked on and possibly in six weeks, it will be produced.
But in the meantime, no one really can predict the exact amount of time it will take and the viruses’ day to day effects on the global economy which is somewhat predictable and very apparent. It is wide-reaching and is currently hurting business and will continue for the foreseeable future and no one knows when things will actually improve.
One thing for sure, the impact on real estate will be detrimental, but hopefully not, but we will see what transpires over the next month or two and I will let you know what the statistics show over the near term.
Maybe it’s time to sell and not wait to try to anticipate and determine the effect on the value of your property. We shall see what the future holds for all of us!
Philip A. Raices is the owner/Broker of Turn Key Real Estate at 3 Grace Ave Suite 180 in Great Neck. He has earned designations as a graduate of the Realtor Institute and a Certified International Property Specialist.
He can be reached by email: [email protected], or by cell: (516) 647-4289 to answer any of your questions, concerns or suggestions for his weekly column.