Economic effects of past global pandemics provide perspective on what the future could hold.
Zillow Research conducted a deep dive into past research and historical data on the economic effects of global pandemics to help provide perspective on what the future could hold under various scenarios.

Up front, I want to say - I am Not a big fan of the Zillow's Listing information or it's algorithm produced property valuations. According to Zillow themselves,  It is not an appraisal and it should be used as a starting point. 

From the Zillow website: " We encourage buyers, sellers and homeowners to supplement the Zestimate with other research such as visiting the home, getting a professional appraisal of the home, or requesting a comparative market analysis from a real estate agent ."

Relying on Zillow to determine your home's value is, at best, a crapshoot. Many of the homes for sale that Zillow shows as Active, have either been Sold or Expired. 

However, Zillow Research does have the resources and staff to dig deep.

The report on Economic Effects of Global Pandemics was put together by Dr. Svenja Gudell. She is the chief economist of Zillow Group. She  has a bachelor's degree in economics, two master's degrees and a Ph.D. in finance from the University of Rochester.

During epidemics such as the 1918 influenza or the 2003 SARS outbreaks, economic activity fell sharply during the epidemic (a 5-10% temporary hit to GDP or industrial production over the course of the epidemic) but snapped back quickly once the epidemic was over.

This pattern differs from a standard recession, which is a situation in which economic activity falls for 6-18 months and then recovers more slowly.

During SARS, Hong Kong house prices did not fall significantly, but transaction volumes fell by 33-72% as customers avoided human contact ("avoidance behavior" like avoiding travel, restaurants, and public gatherings). After the epidemic was over, transactions snapped back to normal volumes. 

During the current episode in China, early news reports indicate that home prices have so far not fallen but transactions have nearly ceased.

During standard recessions, home prices and transaction volumes may fall but this is not always the case (e.g. the 2001 recession).

It is difficult to precisely forecast the probability of an epidemic-related downturn and/or how such a downturn could provoke a standard recession because this depends on how COVID-19 progresses and how this progress interacts with preexisting recession risks and policy responses (ranging from doing nothing to shutting down entire cities for months at a time).

Empirical research into the SARS and 1918 influenza pandemics both indicate a significant loss in output during the time of the pandemic. 

Hong Kong lost 5.1% of monthly output during the 5 months of the SARS epidemic (or 1.75% of annualized GDP). 

The US lost between 7% and 9.5% of monthly industrial production during the 1918 influenza epidemic, with an effect on annual GDP of 0.5%. 

The effects vary by sector-the epidemics led to people curtailing unnecessary social activities and curtailing human contact, which led to larger falls in services and (semi-)durable goods, while the effect on manufacturing is influenced by trade spillovers.

Since consumers wish to avoid nonessential human contact, the 2003 SARS pandemic led to a temporary fall in monthly real estate transactions from 33% to 72% vs. baseline for the duration of the epidemic, while real estate prices held steady.

Meanwhile, during the current episode in China, news reports and early data provided by Goldman Sachs indicate a near-shutdown in the volume of Chinese real estate transactions, although there is not yet a clear effect on real estate prices.

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