In these times of growing uncertainty, I have received numerous questions about the housing market. Is it going to crash? Will I lose the equity in my home? Is it wise to buy or sell right now?
While I cannot predict exactly what will happen in the coming weeks and months, I can shed some light on what the experts in our field are focusing on. On March 16, a chain of significant changes began to happen in our state. Schools and retail establishments closed, dine-in-services at restaurants were no longer allowed and gatherings of 10 or more were banned.
Some companies were able to transition their employees to work from home while others were forced to lay off a portion, or in some cases all, of their employees. Real estate in-person showings and open houses were no longer allowed, and although real estate has been deemed essential, only in-person tasks that were necessary to facilitate a closing were allowed.
Reflecting on our Aspen/Glenwood MLS data from March 16 to April 16, we see a few hints as to the impact these measures had on our local real estate market. Most notably the number of new listings in 2019 was more than double at 552 compared to 242 in 2020. Additionally, the total number of “back on market” properties increased from 102 in 2019 to 141 in 2020. From this data we can see that many sellers were apprehensive about listing their homes on the market and more under contract homes terminated in 2020 compared to 2019. However, the number of closings remained fairly similar to 2019, showing that most buyers and sellers chose to move forward with a purchase if it was already under contract. In order to fully understand the impact that COVID-19 has on the real estate market in our area, we will need to see how these trends continue to evolve over the next 60 and 90 days.
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On April 20, Gov. Jared Polis announced that private in-person real estate showings will be allowed starting April 27. Although in-person showings were not allowed over the past month, many homes have been put under contract using virtual showings. Additionally, title companies are hosting virtual or curbside closings. Meetings with lenders, realtors, and other parties within the real estate industry have moved to digital platforms and e-signatures on contracts and lending forms.
Impact on Buyers: Due to loss of job or financial strain, some buyers are having a more difficult time qualifying for loans. Despite these challenges many buyers are choosing to move forward due to interest rates at an all-time low, meaning many buyers are finding that they may be able to purchase 20-30% more home for the same payment they would have had a year ago. In any changing market it is always important to evaluate if the purchase is intended to be a long-term investment, at least two to five years, or if the desire is to re-sell quickly and evaluate the level of risk associated with the purchase.
Impact on Sellers: There are still buyers who need to buy, and with low inventory the listings that are available are receiving more attention. With buyers at home, we are seeing increased online traffic and utilization of online open houses, video tours and virtual reality home tours. Sellers have the ability to choose whether or not to allow in-person showings prior to accepting an offer on the home, but even a strictly online listing would give the home significant exposure. At this point, some sellers who really need to sell are open to giving out deeper discounts than is typically seen at this time of year, but as a whole we are seeing the wait and see approach from most sellers regarding price reductions.
It is impossible to anticipate exactly what the next few months hold for the real estate market, but with a predominately primary home buyers’ market in the Roaring Fork and Colorado River valleys it is expected that demand will still be present, it just may be less than we have seen in the past. Based on the collaboration we have seen in our community over the last month to make deals work, I expect we will continue to see real estate transactions happening regardless of the circumstances. Bottom line is buyers are still buying and sellers are still selling. Every market has its own challenges, but ultimately each buyer and seller needs to evaluate these impacts to determine which choice is best for them at this time.
Alisha Riddile is a broker associate with Roaring Fork Sotheby’s International Realty in Glenwood Springs.