HBR July Stats are out and w/ low interest rates, low inventory and pent up demand, we are seeing an upward trend in local markets and price points. I am noticing the luxury market is starting to build its inventory as sellers start to list their homes that they have put on hold during this pandemic. Since public, in-person open houses were made available, sellers have been more confident about listing. They are also seeing the flurry of activity taking place on those who took a chance and listed in uncertain times. Buyers in the local pool are ready and waiting due to the low interest rates but not enough sellers are pulling the trigger and listing there homes.
Here are scenarios to consider as well...some may have planned to sell this year and buy a bigger home but they may have lost their jobs, have cutback hours or their business is hurting due to the COVID pandemic. This has created a stall in local lateral and upward moves. Another market is the relocation pool of consistent buyers and sellers who often come and go every 3, 5 and 7 years. With the economy at a stand still due COVID across the world and especially to the airports shutdown here, I’m sure relocation moves are also at a halt. In return, shrinking that market as well.
Lastly, our luxury market and short term rental market is hurting the most due to the airport lockdown. Without tourists visiting and filling our hotels and short term rentals, owners lose money and carrying these investments become more difficult every day that goes by. Many are resorting to long-term rentals at lower than expected rents.
The luxury market ($3M+) here often relies on overseas buyers, whether they come from feeder markets in the US mainland or other countries, primarily Asia and Canada. The 14-day mandatory quarantine for every visitor entering our state discourages most any visitor unless they have an extra two weeks to spare. Most do not and therefore are holding off until the flood gates open back up. That will be the day that we see a huge spike in activity. I just hope it’s soon and while interest rates are still low!
I am checking in with other feeder markets in the US and seeing how their markets are doing during this pandemic. I’ll give an update on that in the near future as well! The goal is to adapt to change, accept our new normals, study what lies ahead, prepare for the future and hope for the best. Oh and lots of prayers! Stay safe and positive in attitude, not COVID!