Rebuilding America: Mix of optimism and concern surround Lake real estate future
Real estate is a crucial segment of the economy at the Lake of the Ozarks. To a large degree, it’s the engine that supports our schools and communities. Property taxes are collected on real estate values, and those taxes are significant line items for city, school and county budgets.
We all remember what happened to the real estate market in 2008-2009 when we last experienced a recession. Sales virtually halted at the lake – and around the country – and the flow of real estate tax dollars slowed precipitously as well.
Whispers of another major real estate setback began to circulate shortly after the lake area and the country were ordered to stay at home in mid-March when COVID-19 began to sweep the country. Real estate agents, as we all were, had to redesign their business plans without the ability to show properties.
“The lake area has done a wonderful job with social distancing and our low infection rates reflect the efforts of the community,” RE/MAX Realtor Karie Jacobs said recently. “I am excited about the lake opening up.”
She offered a bit of caution, however, in moving forward.
“It is very important that as we open and are exposed to more risk, we remember the adjustments made in our lives and continue with the measures that have been successful in keeping our community safe along with the visitors to our wonderful lake.”
As Missouri Gov. Mike Parsons, health departments and local governments began to lift some of the restrictions in early May real estate agents were able to get out from behind their desks. The coronavirus had forced Realtors to sharpen their social media and online skills.
Virtual tours were set up for potential buyers. The shuffle of paperwork for making offers and counteroffers was done online, and even title company closings were handled via our computers and electronic devices.
Even a month ago when most of us were shuttered at home in our virtual offices, there was a “Show Me” attitude among Realtors. But as the rules have relaxed, Realtors are having more face-to-face meetings with potential buyers and sellers using precautionary social distancing and face masks.
“I have confidence that the market will recover quickly at the Lake after our brief pause,” Jacobs offered then. “The fundamentals of the real estate market are strong and there isn't any reason to panic. The most important issue at this time is to take a pause and focus on your family and their safety.”
Jacobs backed her optimism with first-quarter 2020 sales which are ahead of the same period for 2019.
First quarter 2020 sales showed an increase in units sold/closed in condo and homes classifications, according to MLS information provided by Jacobs. As of March 31, there were 486 units sold/closed compared to 440 a year ago. And 2019 year-end statistics from the MLS reflected a strong year as well.
The Bagnell Dam Association of Realtors reported total volume of sales jumped 6.23 percent from 2018-2019. From 2016 to 2019, total sales volume skyrocketed 29.7 percent.
Information was compiled from the Bagnell Dam Association of Realtors MLS for the period Jan. 1, 2020, ending April 1, 2020, and same time period for 2019. Data may change slightly with additional input of delayed sale data for 2020.
Even with economic uncertainty, there is optimism within the real estate and lending markets.
Looking at MLS statistics for April, it’s a mixed message.
“Even though April is reflective of the pandemic, the numbers show mixed messages,” Jacobs said.
Sold transactions were down about 8 percent for the month, yet the average sales price, median listing price and the median selling price for residential/villas/townhomes were all up slightly.
And, the number of days on the market in middle of pandemic were also down.
“If we were seeing a true panic in the market, we would expect sales prices to go down and we haven’t,” she explained. “There’s nothing to panic about.”
Interest rates are low
“Interest rates are phenomenally low and may go lower once all of the loan applications move through the system,” local lender Nick Sutterer of MHQ in Osage Beach explained then.
“It could be one heck of a season. Current rates are in the upper 2 percent range for 15-year loans and in the lower 3 percent range for 30-year fixed loans. Those numbers are based on good credit and good loan to value purchases. There should be no reason to worry about real estate values,” he said. “Values should maintain status quo.
He noted that lake-area real estate inventories have been low, which pushes prices up – typical supply and demand economics.
“We won’t see the foreclosures we did in the late 2000s,” he predicted.
He said the stimulus money being pumped into the economy should help. There are two things that will save the housing markets that were missing from the crash of 2008.
•People who do lose their jobs during this virus outbreak are not only eligible for “enhanced” unemployment benefits, but they can also request that their mortgage payment be put in forbearance during this time of job loss and they will not be counted late.
•Additionally, the government has ordered all government foreclosure activity be stopped at least until early summer.
“There’s no reason to panic. Rates will stay low, and the Treasury Department along with the Federal Reserve have stated they will do what it takes to keep the housing market strong,” Sutterer said.
Snapshot of Lake of the Ozarks Real Estate Market
For seven days ending May 18, 2020
107 - New Listings
28 - Pending Listings
141 - Contingent Listings
65 - Sold Listings