Wow! Who would have thought that we would see a sudden recession caused by a virus? For awhile I’ve known there would be evolution for viruses and bacteria as they try to survive cleaners and antibiotics we throw at them. To see something being compared to The Plague bewilders me.
From my other articles, you can tell what life in Steamboat Springs is like right now. In short, Spring weather with no one here. Those who are here, you see them during the heat of the day then this is a very quiet town.
For this article, I’m not posting value trends. They are pointless now during this time of change, and we need more data to understand the current market. Here’s some thoughts:
Mortgage Rates and Refinancing:
With interest rates so low, it’s a good time to consider purchasing and refinancing. Rates have just moved, so wait for them to really take hold. Interest rates will allow less risk investment purchases and for owners to lower carrying costs on homes/rentals. Lower rates will also make it easier for families to purchase, especially first time home buyers.
Rents:
I talk a lot about rents in Steamboat because they represent how easy it is for someone to be in town long term, workforce housing, and basic investment barometer. Landlords for several years have seen annual 8-10% rises in monthly rental rates. With unemployment being a major concern and a slower recovery from this recession a definite thing, I expect monthly rental rates to lower. I also expect to see more first time home buying happening because it is still cheaper to buy with a mortgage than rent the same home/condo/townhouse.
Home values:
Today I read some articles where economists were comparing this recession to the 1991 housing crisis started from the savings and loan collapse. From what I can tell, there was a 14% decline in home values over 2 years at that time. I don’t expect this market change to be the same. An adjustment, yes, and when the economy comes back, values are changing again.
There are going to be some opportunities coming up. Some persons are going to have to change their investment portfolios, eliminate mortgage payments, and move to new jobs.
Overall Trends:
Following trends in Denver is a 6 month indicator for Steamboat. Steamboat lags by 6 months. We will be able to tell much more as time goes on. I know the really smart guys are considering the coronavirus challenge to go up to 18 months. This is a good time not to be in a hurry and let opportunity present itself.