Scott Bayens: Reopening the real estate market and the interesting road ahead
It’s been a long, strange trip the past two months for our family and nearly everyone we’ve been talking to. Many we know have been out of work, laboring instead to secure unemployment or emergency funds, yet others have been working 50 hour weeks.
This week, a slow and cautious reawaking starts in the Roaring Fork and Aspen areas and more aggressively around the country.
We’re all anxious to come out from behind our screens, get back to the office and enjoy some real face time (albeit masked). But polls also show most of us are nervous about our re-emergence as we watch the national death toll approach 100,000 souls and continue to rise. Here in the Roaring Fork Valley it’s clear we flattened the curve. We did see our share of cases and tragically we lost lives too, but at this point, unless we’re all symptomatic, it seems for now, we’ve got this thing under control.
As hard as hunkering down was, these next few weeks might provide another level of anxiety as we begin to see second homeowners return, some without face coverings, and tourists beginning to arrive.
In the meantime, it’s back to work for local real estate brokers and for some, it’s been game on. The past two weeks since the first restrictions were lifted, we’ve seen a frenzy of activity. As Aspen Times reporter Scott Condon wrote last week, homes in the midvalley between $500,000 to $750,000 are going under contract in two or three days and in some cases with multiple offers. The reason? Pent-up demand, record low interest rates and the everyday need for housing.
There is a window of significant activity in the primary housing market, not just here but around the country. For now, at least downvalley, it remains a seller’s market as inventory remains tight and in high demand. But it’s the higher priced stuff that might take a little while to shake out.
Sellers in luxury markets like Aspen-Snowmass typically take the longest to come off their prices as many can afford to hang on to their assets through tough times. But at the end of the day, not even the wealthy need another second home, so with fewer buyers knocking down doors, those who want or need to liquidate will eventually need to adjust to the market.
And with more than 30 homes at $20 million or higher in the upper valley, you can bet there is incentive to sell in these uncertain times. Toward that end, brokers report an increase in low-ball offers, and my guess is as the summer goes on, we’ll see a few of these monster homes close for 15% to 20% off asking price. Expect to see more homes sold via auction in the near future as well.
Meanwhile, there’s another new phenomenon playing out. There’s been an influx of interest for more private, rural and remote offerings; so-called COVID compounds. The number of inquiries for acreage and raw land away from town is up significantly, including calls for out-of-the-way offerings in the eight-figure range that haven’t seen interest since 2019.
This interest should not come as a surprise to those following the news of the crisis in major metropolitan areas. There was already a shift underway from cities to more rural areas like the Roaring Fork Valley.
A recent survey cited by Axios.com indicated 39% of urban dwellers said COVID-19 has prompted them to consider leaving for a less crowded place. Also, 43% said they had recently browsed real estate websites looking for homes to buy or rent. And 77% said they were very or somewhat concerned their current living situation might expose them or their loved ones to the virus.
Yet another survey, conducted by the National Association of Realtors, showed a whopping 77% of potential sellers were preparing to list their homes after stay-at-home orders were lifted. Experts are even speculating formally fit-to-be-tied down millennials will begin to enter the market as they are beginning to settle in, have children, and are most likely to have jobs that allow them to telecommute. As a result of all these factors, keep eyes out for what could be a historic migration the likes of which we haven’t seen since 9/11.
In the past few weeks, many of us have been reminded of the Chinese proverb, “May you live in interesting times.” It’s not actually a Chinese proverb and in fact is meant as a curse. As its real meaning is antithetical, it’s obviously best used ironically as “uninteresting” times relate more to peace and tranquility. Trying to determine which we are in is just part of our “new normal.”
Scott Bayens (GRI, ABR, CNE) is a Realtor with Aspen Snowmass Sotheby’s International Realty. Learn more about him and view listings at http://www.aspendreamhome.com.