If you are thinking about selling or buying real estate during the next five years, you may want to pay attention to the direction things are heading. For many, residential real estate comprises the largest percentage of their total financial nest egg. It makes sense to keep informed, especially now.
Per the Governor’s Order, in-person home showings were prohibited for nearly a month, with some restrictions finally lifted April 27th. We should see an initial increase in sales activity in the first half of May, but it may not make up for the losses in April.
Home sales in our county for April were down nearly 32% from a year earlier and down 48% from March. Covid-19 also shows up in the number of new Pending Single-Family Home Sales for April, with only 6 as compared with 15 for the prior month. There are some distinct positives such as historically low mortgage rates and the fact that most of our visitors travel here by automobile. With limited commercial flights and cheap fuel, Pagosa Springs will be easier to access than some other mountain communities once it is safe to re-open. Accurately predicting where things go from here is a longer discussion. Some thoughts are explored and presented below, and others will be discussed in Part Two.
WHAT IS THE LONGER-TERM IMPACT OF COVID-19 ON REAL ESTATE?
This is a big issue, and opinions vary greatly among experts. National Association of Realtors Chief Economist Lawrence Yun does not expect much negative price pressure by the end of the 2020. CoreLogic, a leading property information provider expects some housing market slowdowns with the duration driven by what happens to employment numbers in the next 3-6 months. Other analysts are expecting a decline in housing values and a slowdown in the number of sales, well into 2021. Executives at Goldman Sachs, Real Estate Group of the Americas forecasts mixed impacts within different real estate sectors, expecting some good growth in certain industrial real estate and datacenter properties, and tough times for retail properties.
Some local brokers believe there will be a great influx of Buyers coming into Pagosa Springs purchasing a home, cabin or condo so that if a future pandemic or other crisis hits, they have a safe and friendly place to escape. Some Buyers may seek out small mountain towns such as ours for that reason. We will see people that want to leave more densely populated areas. They will need to bring money and a job. Hopefully, they will be well paid individuals that can work remotely, or that bring small businesses to the area.
A few of us remember the handful of Buyers that came to Pagosa Springs in 1999 to escape the Armageddon of Y2K. (Hey…where is my Tin Foil Hat?)
Be sure to watch for Part Two for a more in-depth look at this changing real estate market.
To discuss your real estate goals or questions, call or text Mike at: 970 946-6030, or email him at Mike@PagosaRealEstate.com. You can also explore more on our website http://PagosaRealEstate.com
Mike has practiced real estate over several decades and through strong and challenging economic times. He is President-Elect of the Pagosa Springs Area Association of Realtors, served four terms as a Colorado Association of Realtors Vice President and owns Pagosa Source Real Estate Advisors with his wife Lauri. Check out our website: http://PagosaRealEstate.com
