Covid-19 has certainly wreaked havoc on the retail housing market with social distancing and lockdown restrictions putting a damper on showing homes or open houses. At least that’s what conventional wisdom might be saying, but those in the know are optimistic that real estate prices won’t be hurt by the coronavirus pandemic as economies look to continue reopening.
“As the world has adapted to the coronavirus outbreak, the real estate market has shifted. Although it varies state by state, housing prices have not dropped significantly in the way some may have expected, and the future of the market still remains uncertain,” a Vox.com article said. “While some have lost their jobs and are looking to downsize, others are packing up moving vans and upgrading to larger homes. A recent study from OJO Labs concluded that 80 percent of buyers postponed or stopped their housing search, Forbes reported. The same study showed that buyers are still looking at listing photos and taking virtual tours of properties.”
“Buying a home is a very emotional process,” said Sam Chaudhry, a real estate broker, and managing partner at Remax in Houston. “Because when people walk in, they want to see their furniture in there, they want to see where their kids can be, or where they want to be growing their family.”
Real Estate ETF Exposure
Exchange-traded fund (ETF) investors who want to get exposure to the real estate market without actually owning the assets can do so via funds like the Real Estate Select Sector SPDR Fund (XLRE). XLRE seeks to provide investment results that correspond generally to the price and yield performance of publicly traded equity securities of companies in the Real Estate Select Sector Index, which includes securities of companies from the following industries: real estate management and development and REITs, excluding mortgage REITs.
Here are a couple more real estate ETFs to look at, including one that offers a broad range of real assets:
- FlexShares Global Quality Real Estate Index Fund (GQRE ): seeks investment results that correspond generally to the price and yield performance, before fees and expenses, of the Northern Trust Global Quality Real Estate IndexSM. The index is designed to reflect the performance of a selection of companies that, in aggregate, possess greater exposure to quality, value, and momentum factors relative to the Northern Trust Global Real Estate Index.
- FlexShares Real Assets Allocation Index Fund (ASET ): seeks investment results that correspond generally to the price and yield performance of the Northern Trust Real Assets Allocation IndexSM. The underlying index measures the performance of an optimized allocation to the underlying funds that is intended to provide exposures to certain real assets and minimize the overall volatility of an investment in the underlying funds.