How's the Market? : Insight from Rives Bailey, Principal Broker, Montague Miller & Co
Despite the many challenges and events that have taken place this year (and continue), the residential real estate market has remained robust. All regions of the state show increased sales through the third quarter with the areas Montague Miller & Co covers on average being up about 4.5%. Also consistent is the fact that the number of available homes is down in all regions with the average across the state being down about 38%.
These figures vary dramatically from community to community but the trends are consistent. With high demand and low inventory the expected result is an increase in median sale prices and decreases in days on the market which is also what we are consistently seeing. Certain areas are seeing significant amounts of new construction although that is being hampered by limited numbers of qualified trades people (a result of the mortgage meltdown) and constraints on building supplies. Lumber prices alone are up three fold since March due in large part to disruptions related to the pandemic. In short, new construction would have to increase dramatically to fill the low inventory void which is not likely to happen in the near term.
The pandemic has created a number of other interesting shifts that are beginning to appear in the data and may reflect much longer term changes. Since many are now working remotely the need to live in higher priced large urban areas is diminishing. We are seeing this movement to smaller communities further from the large metro areas where larger homes are available at lower prices. Larger homes also become necessary when many are working or learning from home. As a company we are blessed to live and work in areas along the Blue Ridge with scenic beauty, great quality of life, and reasonable commutes to urban areas, making our market areas attractive to many.
In contrast to residential sales, there is likely an oversupply of commercial office space as many are discovering that remote working does work. Residential rentals, especially in high priced urban areas, are facing the challenge of lower occupancy and falling rental rates. These trends will be interesting to watch over the coming months and years. So what does this mean going forward? With low interest rates that are expected to remain for some time, low inventory which is likely to continue, and shifts in work and home needs caused by the pandemic, the residential real estate market should remain robust. As a company we have been blessed to exceed both our listing and sales numbers from last year and to be consistently ahead of the market averages. We have you, our loyal clients to thank. We are truly grateful for the trust you have placed in us.
If you would like to know how you might benefit from the current market conditions reach out to firstname.lastname@example.org