In these unprecedented times, I find myself reflecting on Rod Serling’s Twilight Zone monologue on travel into an uncharted dimension, “Beyond that which is known to man…It is the middle ground between light and shadow, between science and superstition, and it lies between the pit of man’s fears and the summit of his knowledge.”
We are indeed in a land somewhere between science and superstition, between our fears and the inadequate summit of our current knowledge.
When I am faced with navigating unfamiliar terrain, I tend to fall back on the tried and true method of setting bearings, establishing anchor points in the current environment then projecting a course based on personal experience and/or historical references.
As a thought experiment, I applied this approach to making predictions regarding the effect of the coronavirus pandemic on U.S. home prices.
My working hypothesis for this experiment, to be proven or disproven, is this: One of the economic consequences of COVID-19 will be the collapse of U.S. home prices.
Set Your Bearings:
Before we start making predictions, let’s first set our bearings by reviewing the state of the housing market prior to the encroachment of the pandemic onto American soil.