The last few months have left many uneasy, concerned and feeling out of control with how the corona virus would impact both the nation and our city. Now that we are about a month into the safer at home model and home showings were able to resume, I am happy to be able to report some good news.
Inventory is as an all-time low, however, demand is not. Although, not great for buyers, we seemed to slide right into the busy season without missing a beat. Homes on the market experience multiple offers and go under contract within days. The best explanation to why we have seen such extreme volatility in the stock market but not in the real estate market is a simple: supply and demand. Nationally, we still not have enough supply of affordable homes.
Long Term Rentals.
This one was a doozy from the start of corona virus as renters felt the immediate impact of the sudden shutdown. In April, many landlords were very concerned about their ability of receiving rent over the next few months. Anxiety continued to rise as eviction moratoriums were put into place for government backed mortgages and many states. This put a lot of pressure on landlords as mortgage payments continues while rents may have stopped. However, nationally, 91% of rents were collected in April and 93% were collected in May. Stimulus checks and unemployment most likely contributed to May rent collections.
Almost immediately the world saw the impact of corona virus and short-term rentals as a travel ban was passed. Overnight, short-term rentals saw guests cancelling reservations and were left wondering how they would continue to make their mortgage payments. Some were lucky enough to be able to pivot into a long-term rental. However, as states reopen, we are seeing a surge in demand for Airbnb’s. Colorado has seen an increase in hyperlocal travel (2-3 hours away from home) and ‘glamping‘.
Overall, we have seen some great progress, however, we still aren’t in the clear. Colorado has not fully reopened and there are still a few unknowns. As things progress I am keeping an eye on a number of indicators, such as, interest rates (the Fed is still pumping QE into the bond market buying up bonds which results in lower interest rates for consumers), the impact of unemployment especially when it ends this Fall/Winter, and forbearances and deferred mortgage payments coming due over the next 6 months. However, the progress that we have made so far is incredibly positive!
Liz is broker and owner of Liz Daigle Realty.