COVID-19 and the Vermont Housing Market

At the start of the COVID crisis, many people started echoing feelings and sentiments from the last economic downturn over a decade ago. Do we need to prepare for another housing crash?

Even though the economy came to a screeching halt a few months ago, this downturn is quite different from the housing recession in the late aughts. Last time the economy was impacted by an overinflated housing market that forced people to sell and a lack of demand that drove prices down. This time the economy is frozen by a global health crisis. While we won't make it through this crisis unscathed, we shouldn't see the same firesale and foreclosure crisis of years past. Interest rates are low, buyers are still getting approved for mortgages, and home equity is higher than the last recession. Although unemployment is hitting staggering highs, the CARES Act allows homeowners with government-backed mortgages to receive mortgage forbearance while we wait for the economy to recover. 

The Vermont housing market was very healthy in the weeks leading up to the COVID-19 crisis. Low inventory, coupled with high demand, made for a promising spring market that never had the chance to bloom fully. Then the housing pipeline was in limbo as we quarantined in our homes these last few months. Now, the recent green light from Governor Scott to work with restrictions has sparked the housing market out of its slumber. 

We are already noticing pent up economic energy from buyers who are benefitting from historically low interest rates and are driven by the desire to own a home of their own. Last week, we received multiple offers on our listings, with many coming in over asking. Our buyers are facing equally stiff competition. A competitive market means a few things for those looking to buy and sell their home.
 

For Sellers

Now's the time to get your home listed. COVID-19 restrictions are only going to loosen as we move forward, and buyers who couldn't tour homes for the past few months will be eager to see what is on the market. Vermont Real Estate Company agents are strictly adhering to all of the recommended guidelines to keep you and your home safe. This includes proper sanitization, virtual walkthroughs, and social distancing. We've noticed an increase in home inventory over the last few weeks as more sellers are ready to list their property. Getting your home on the market now can preempt an influx of new homes that might reduce your market value.
 

For Buyers 

It is essential that you are pre-qualified for a loan. Your pre-qualification shows that you’re serious about buying a home. Agents won’t put their clients or themselves at risk for buyers who are ‘just browsing’. A pre-qualification letter for a loan that provides the buying power you need to make a competitive offer will help in a multiple offer situation where speed can be the difference between winning and losing. Discounts and additional time to find the home that fits your needs won't be available. You need to be prepared to make a competitive offer when you find the home you want.

Additionally, many banks and credit unions are facing significant delays in qualifying loans. People who are looking to buy in the next few months should start the loan process now so you aren’t playing catch up when you’re ready to make an offer. There’s always been a lot to consider when buying a home and COVID has only added another wrinkle to the process. Our experienced agents can help you navigate these waters to make sure you have a smooth home-buying experience during these uncertain times. 

We are interested to see how new construction is impacted by reduced access to capital and the construction hiatus caused by the quarantine. As demand continues to increase and inventory stays low, it's only a matter of time for new construction to overcome the temporary loss in momentum. In the meantime, if you're ready to sell your home or start the home buying process, then give us a call. We're happy to discuss the current market climate and offer our services so you can rest easy.