Our local real estate market has been on an unprecedented run these last years due to the popularity of the Adirondacks and a limited inventory of homes for sale. This bull market positioned home owners well for continued pricing optimism going into 2020. We all know however that our world has been turned upside down by COVID-19.
I have received many calls and emails from potential clients asking how COVID-19 will affect our local real estate market. To answer peoples questions, we should look to historical events and the effects those events had in the short, and long term.
SARS, H1N1 and other recent pandemics caused short-term market volatility. While it’s challenging to compare the full health impacts of COVID-19 with those strains, the markets stabilized in the range of three to six months on average during past events. Depending on how well, and how quickly, we rebound from this health crisis will determine how well, and how quickly, the real estate market rebounds.
We do have a couple of important items in our favor. First off, there is, and will likely continue to be, limited housing inventory. This will stabilize the local real estate market as it is extremely unlikely that there will be an oversupply leading to price reductions. It is expected that once the economy opens back up, the pent up demand will fuel a quick resurgence in real estate buying and selling. Secondly, the Federal Reserve has cut interest rates to historic lows which will make home purchasing more affordable. Home buyers know that this is temporary, and they will need to move quickly to take advantage.
In my estimation, certain sectors of the local housing markets will be more robust than others. While the rental income producing market may be seeing some initial resistance, the local and luxury markets will likely continue to be active.
The bottom line is that we will get through this, just as we have overcome hurdles in the past. Real estate values are determined by supply and demand, and consumer confidence. How strong will the local real estate market be in 2020? It depends on how people react. I remain optimistic that we will get through this and be stronger than ever. We will get through this, together.
Bob Miller is an Associate Broker with 10 years of real estate experience as well as 15 years of service as a former Lake Placid School Board member, and is currently a 3-time elected Town Councilman in Lake Placid.