A Historical Look at Pandemics and the Housing Market

While most of us have not experienced a worldwide health crisis of the magnitude of coronavirus, similar events have occurred before — and may provide clues to what we can expect in the months or years ahead. With that in mind, Zillow Research took a deep dive into the economic effects of previous global pandemics to offer some perspective on the possible effects of the current one.

These are the key findings of the report:

Big dips were followed by fast recoveries

During the 1918 influenza and the 2003 SARS pandemics, economic activity fell sharply, but snapped back quickly once the pandemic was over.

Pandemic patterns differ from typical recessions

The rapid fall and rebound associated with those pandemics differs from a standard recession in which economic activity falls for six to 18 months, and then recovers more slowly.

Home sales dropped, but prices were less affected

During the 2003 SARS pandemic, home prices in Hong Kong did not fall significantly, but transaction volume did.

There are still many unknowns

History can give us insights, but our current situation is unique and influenced by many factors. Precisely forecasting the economic effects of COVID-19 is complicated by the uncertainty around the virus’ spread, the policies adopted to control it, and how those two things might interact with recession risks that already existed at the start of the year.

For more on the latest housing trends in light of coronavirus, see Zillow's home sale and pricing forecasts for 2020 and 2021.

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