“The temporary softening of the Real Estate market will likely be followed by a strong rebound once the economic ‘quarantine’ is lifted, and it’s critical that supply is sufficient to meet pent-up demand,” says NAR Chief Economist Lawrence Yun. In our region, low inventory in the lower end of the housing market has already created some ‘pent-up’ demand. Hopefully listings this spring (mid to late May) will help to alleviate some of that buyer pressure.
Our Region’s Housing Market
In Stowe and the surrounding communities, we are hearing from buyers who are considering a move in this direction, as Vermont is seen as a ‘Safe Harbor’ due to lower density, clean air, etc. People are also willing to rent while they wait for the right property to come to market. This is a similar dynamic to what we experienced post 9/11 in Vermont – buyers coming from the cities, looking for refuge in a safe environment.
Times are uncertain, but our goal is to keep our clients and customers informed on the basis of fact versus fear. The facts are these – the housing market is NOT in a crisis similar to the 2008 scenario, even with the volatility in the stock market and uncertainty about the Coronavirus.
Here are 5 reasons why:
- There is no surplus of homes on the market. Inventory that is correctly priced and livable is depleted. In fact, when there is a new listing on the market in certain price bands, we are often seeing multiple offers due to the low inventory.
- Value appreciation over the past few years has been slow and steady – far from the erratic, double-digit increases in value like we saw after 9/11, which was not sustainable.
- Rising prices were not sustainable in the previous housing crisis due to the economic combination of lower wages, mortgage rates over 6%, and high housing prices. When the economy started to fail, this was the perfect storm for foreclosures. Luckily, we are not witnessing these conditions and came into the virus pandemic situation with the strongest economy we have seen in this country in 50 years.
- Mortgage standards were entirely different back in 2008 – it was far too easy to get a mortgage back then… Remember “no doc” loans?
- Today people are equity rich and not tapped out. Back in 2008, people were using their homes to make ends meet by withdrawing the built-up equity.
We are available to help answer any questions you may have regarding buying or selling in this uncertain time, and please feel free to reach out to us. The Bateman Group is sending all our clients, customers, family and friends our best wishes for the health and safety of you and your family.