Even the worst events or situations have some positive aspect. I wanted to bring you my optimistic view from a real estate perspective. You’ve heard the doom and gloom and know the seriousness of this Pandemic, here is the silver lining in relation to housing specifically in Denver.
Blame CoVid 19, not Real Estate.
The last worldwide recession was caused by the real estate industry; mortgage back securities to be more specific. As the culprit of last recession, many people have been nervous and suspicious about the real estate market in general. For me, I can breathe a huge sigh of relief that this recession was not caused by my industry. In fact, no one country or person or industry is to blame. Everyone is it in this together it will take worldwide collaboration and unity to contain the virus.
What do you need more than toilet paper: A Home!
Home just became the hottest commodity on the market. Everyone needs a home right now. Home just replaced schools, offices, church, restaurants, bars, workout studios, colleges, coffee shops, and stores as THE PLACE TO BE, the only place in fact you should be during the next few months. It is my professional opinion that real estate prices are stable. With much uncertainty in the stock market real estate seems like one of the most stable places to park money right now. Market basics are simple, price is the result of supply and demand. With low-interest rates and many people being isolated at home, I do believe the demand for homes will increase. However, it is already clear to me that supply on the market will decrease with many owners opting not to list for litigate fear contamination. Increased demand and decreased supply could actually lead to stability and even price increases in the short-term.
Thank you, Denver for regulating the hell out of short term rentals! (I never thought I would say that)
Unfortunately, there are markets within Colorado such as the mountains regions that will be dramatically impacted by the cancellation of short term rentals (aka Airbnb) which make up a majority of the housing market. Denver’s short term rental policy only allows short term rentals for primary residences. This policy should insulate our market from the dramatic hit that other markets will face from the total shut down of all the tourist activity.
Suspension on Foreclosures
Homeowners who have lost income or their jobs because of the coronavirus outbreak are getting some relief. Depending on their situation, they should be eligible to have their mortgage payments reduced or suspended for up to 12 months. Under the plan, people who have suffered a loss of income can qualify to make reduced payments or be granted a complete pause in payments.
Refinance Relief Package
Many homeowners are very lucky to be getting what I deem the “refinance relief package” from falling interest rates in a few months. The worse the COVID-19 outbreak gets, the lower mortgage rates will go. To be clear with you: interest rates are not stable right now. It is in my professional opinion that in the coming months we will see the lowest interest rates ever. Lower interest rates give homeowners an opportunity to refinance their mortgage and effectively pay less every month. For homeowners who face unemployment and uncertain times ahead, it should bring you a sense of relief that in the coming months your housing expenses could actually decrease if you refinance. The market is extremely volatile right now, the worst is yet to come. Lenders and banks are overwhelmed with the volume currently and federal cuts in the interest rate have not moved through the pipeline yet to actually create lower mortgage interest rate’s. My advice would be to stay patient and start conversations with your lender and prepare your documents for when interest rates become more favorable than your current situation.
We are innovating our services.
As a real estate professional, we are bracing ourselves for a slow down but are optimistic that through innovation we can offer our services during uncertain times a safe manner. At Living Room Real Estate we plan to digitize many of our services including doing meetings online and offering virtual showings for our clients. As a millennial owned real estate firm we are already on the cutting edge of utilizing social media, listing videos, and online tours. For all of our buyers and sellers and will continue to optimize our services through technology.
A much-needed break to catch up on life.
All of us will find that we have a little bit of extra time around the house in the coming months. If you find yourself bored I would encourage you to pursue DIY home projects that I add value to your home for when the market returns to robustness. That was also a great time to start your garden inside to be ready for spring sunshine. Maybe this is also a time to pursue a book you’ve been wanting to write or a business you’ve been excited to start. For me, this is a great time to nourish my body and my soul. I’ve been wanting to drink less alcohol and eat more healthy – with social pressure gone and bars and restaurants closed, it seems like a perfect time to get healthy and lose a few pounds.
How can you contribute to the economy?
As soon as the news settled in, I had to ask myself: “I proceed with building a house this summer?” A major investment I have planned. I eventually landed on my answer: an ecstatic YES. We all contribute to the economy and right now I encourage you to keep making decisions that will provide jobs and stimulate our economy. By moving forward with the construction of my Accessory Dwelling Unit (ADU) I’m providing jobs, so many jobs that will be needed to keep people from hardship. Also with the lower state interest rates and higher unemployment this project will be more affordable to build than previously calculated. I’m going for it and I would encourage you to do the same!
I hope my silver linings brighten your day and you feel more optimistic about this time and the real estate outlook.