COVID-19, Real Estate, & the Future
COVID-19 is changing all aspects of our lives including the real estate market. This is typically the time of year when the real estate market really heats up. The question now, is will the coronavirus outbreak make a difference? The simple answer is, YES. For the last few weeks, showings and open houses were not permitted. With restrictions starting to lift, beginning next week, April 27th 2020, showings can once again take place. So real estate in Steamboat Springs, Colorado will pick up.
THE GOOD – Supply | Demand – Today, real estate inventory is very low. Even lower because many sellers withdrew their homes from the market during the health crisis. Coupled with the lack of new construction and higher demand over the last few years, the national real estate numbers are showing it’s a Seller’s Market. (see chart below)
This seller’s market statement is making the assumption the buyers will be back.
THE BAD – We know all previous buyers might not be looking to purchase a home now. Unemployment in Steamboat Springs is pretty high these days. And, because this economy relies on tourism and consumer spending, we’ll need to see people getting out and vacationing to see real estate numbers gain traction. So, not only will it take for jobs to return, but travel and tourism need to get back to normal or Steamboat will be a quiet town. As you see in the graph below, the food service industry has been hit hard with unemployment numbers.
THE GOOD – Unlike the 2008 real estate crash which saw many home owners over leveraged and underwater overnight on their loans, today is much different.
Because of robust appreciation over the years, 53.8% of home owners in America have over 50% of equity in their homes. breaking it down even further, 37% of home owners own their home ‘free and clear.’ Meaning they don’t have a mortgage. As well, 26.7% of homes have at least 50% of equity (see below graph). This means that even if the real estate market slows down and prices fall, most home owners WILL NOT be underwater. Therefore, desperation sales will be less prevalent today.
THE UNKNOWN – Just how fast will the Steamboat Springs economy get back to normal? With 50% of our real estate sales coming from outside of Routt county, how long will it take for those owners / buyers / sellers return to normal?
We are headed in the right direction. Restrictions are easing up. People are showing optimism. Interest rates are incredibly low. Some real estate prices have gone down thus affordability has never been better. Properties are selling. As they say, timing is everything and if we get back to “normal” sooner rather than later, then real estate will be less impacted.
Want to learn more? Check out the links below for more insight into the Steamboat Real Estate Market.
Charlie Dresen 970-846-6435 or Charlie@SteamboatsMyHome.com