You know, like buying concert tickets in the parking lot just before the show for less than face value. As usual, I waited until the last minute to write this column despite not being so busy with work these days. But, in these rapidly changing times, it may mean that I’m less behind the reality curve when this issue hits the newsstands (or drops for those signed up to receive the Merchant Herald e-edition). The state’s “shelter” order as it pertains to the real estate industry has been the topic of much debate and discussion over the past month as to which part of our business activities are considered essential and therefore allowed, and which are prohibited by the Covid lock-down. Ultimately, the interpretation was that existing contracts could be worked on, so inspections, surveys, closings etc… were okay, but marketing activities, like showings, were not. Over the course of these recent weeks I’ve had a number of folks ask if I thought prices would drop, or alternatively, if people would flee Denver or California, in droves and over-run the valley. Mostly I took the magic 8-ball approach, answering “Too soon to tell”. However, at this point it seems that once the quarantine is lifted and we’re open for business again that there will be enough demand to sustain our local real estate market but, thankfully, it probably won’t be a flood of ‘outsiders’ begging to buy a place in the country.
April 20, 2020 – the day that the price of a barrel of West Texas Intermediate crude went negative, was a day that the law of supply and demand ruled. Thankfully, when it comes to the local real estate market, the supply and demand equation isn’t nearly as volatile (pun intended). When things begin to go back to normal, we will have exactly the same level of supply as in January – not a lot. And there will be demand. Even a moderate level should be adequate to support our market enough to prevent values from declining. And, even if the market does slip some, it will have been after many years of rising prices, so most sellers will still be in the black, even if not as much as they like to be. First-quarter sales were really strong in the North Fork which should be a good base upon which to rebuild. Gross home sales volume was almost 50% higher than for the same period last year, posting $11.6M vs. $7.8 in 2019, and pushing the average sale to $343,349 – up more than $100,000. Wait, what? Yep, a few extra home runs can really bump the average, and there were a few big sales to open the year that really made a difference. My hope is that if people have been out of work for a month or two and have fallen behind on payments that creditors will make accommodations to prevent foreclosure, and give people time to get back on their feet, avoiding most of the problems that the 2008 bust brought. Meanwhile we wait and watch. Stay safe out there.
