Every industry in the US is being affected by current conditions, and the Real Estate industry in Midland, Michigan is no exception. Many comparisons are being made to the tough market of 2008 and the impact of the Great Recession. However, our current situation is completely different. As this is an unprecedented situation, there is no playbook or historical data to reference. All we can do is look at the facts we have.
Housing Inventory Shortage
Leading up to the housing bubble burst of 2008, there was an abundance of homes on the market. Adding foreclosures flooded the market with cheap housing and drove prices down. In contrast, we have seen a prolonged shortage of available housing inventory in our area that will most likely work in our favor at this time. While demand may wane as we weather the economic uncertainty of the coming months, experts believe that as the economy stabilizes and rebounds, the housing market will rebound as well without a drastic loss in home values. While some buyers are in a holding pattern, the circumstances that lead them to look for new housing have likely not changed, and they will restart their home search.
The Foreclosure Factor
Experts anticipate we will see fewer new foreclosures in the coming months for several reasons. First, most homeowners are in a better financial position than they were in 2008. Subprime lending has become a thing of the past and stricter lending requirements mean borrowers are more qualified for the loans they have. Also, the recent rebound in home values means fewer homeowners are over-leveraged. Second, many lenders and government programs are being rolled out to help stabilize the market including historically low-interest rates and moratoriums on foreclosure and eviction proceedings. Fewer distressed properties entering the market will help keep inventory low and home prices stable.
What to Look For
Based on restrictions to Real Estate activity per the current Executive Order in place, we will most likely see fewer homes being put up for sale in Midland as we head into the spring market. Homes that do make it to market and sell may have longer closing times. From document signing to inspections, to appraisals and closings themselves, everything is being handled just a little bit differently to ensure the safety of all parties. Closing times may be extended due to low-interest rates spurring mortgage refinancing activity. Lenders are busy getting these files through processing in addition to helping new borrowers. As professionals in all aspects of the home selling process navigate our new normal, home buyers and sellers may expect unanticipated delays.
What we are doing
Realtors® are taking this time to stay in touch with clients, improve on their skill set via webinars and online learning courses, and fine-tuning skills by updating or taking new designation courses. As well, to better take care of our clients, we are staying in communication with national trainers specific to real estate, so we can convey to you the most accurate information. We are marketing and making ourselves available for questions from home improvement, to ‘is it a good time to refinance’. We are still the experts in all things real estate. Currently, the entire home buying or selling process can be done virtually, with a little help from our sellers. Business is being conducted, just in a new way.
While much of the impact of our current situation remains to be seen, one thing is certain in these uncertain times: The agents and staff of Park Place Homes are committed to continuing to monitor the Midland Real Estate Market. It is our goal to educate ourselves and our clients in order to make the best decisions possible. If you have questions about the market, home values, or home improvement projects, please don’t hesitate to reach out. We are always happy to help.