Real estate still booming
What a wacky 12 months it’s been.
The threat of COVID-19 shuttered our doors for about 60 days starting mid-March of 2020. Businesses locked down, schools sent children home for makeshift learning styles, we masked up and kept our distance for fear we would be the next victim of the coronavirus.
But an unexpected thing happened in early May 2020 when Missouri Gov. Mike Parson eased restrictions. Not only did we emerge from our shelters in an abbreviated sense of normalcy, but new friends and neighbors rushed into the Lake of the Ozarks as a respite from their shuttered and locked-down cities and states.
Businesses and governments at first braced for anticipated declines in retail sales and retail sales tax revenue. However, the throngs of visitors flipped the coin and after national publicity of a wild and wolly Memorial Day Weekend at the Lake, the area become the Mecca for economic resurgence.
The real estate market, fearful of another market crash like 2008, suddenly sizzled with activity. In fact, the volume of all real estate sales for 2020 topped $1 billion for the first time ever. The Lake of the Ozarks was open for business and individuals, couples and families still stuck in the larger cities and closed states picked up stakes and bought, bought, bought.
At a Re/Max real estate symposium in October, it was reported there were only 72 condo units for sale in the entire lake area. That number has dwindled, and the same has happened to virtually all types of real estate.
“It’s definitely a seller’s market,” Bagnell Dam Association of Realtors President Dan Ralston said. “It’s crazy market, but the problem now is there isn’t much inventory of properties for sale.”
What does become available is under contract within 48 hours of listing at or above asking price; there are cash offers and bidding for some properties; contingencies and appraisals are being waived to hasten sales.
“Most Realtors have never seen anything like this,” Ralston, an agent with Expo Realty of Lake Ozark.
He says the upward trend for real estate actually started about the time the country shut down. People decided if they were going to be stuck somewhere it might as well be the beautiful Lake of the Ozarks.
“It’s apparent a lot of people sold their city homes and moved to their lake house permanently about the same time,” he said. “Families with children in sports found those activities shut down so they picked up and moved here.”
In the last six months, there have been 529 lakefront properties sold. As of late March, there were only 62 active lakefronts available.
There could be trouble on the horizon, Ralston says, if the current real estate bubble breaks. Properties are selling for 40,000-80,000 above list price, and that demand may not hold. Mortgage lending rates are near historic lows but economic policy changes at the national level could reverse that consumer-oriented trend.
“It’s a Catch 22. Sellers can get a premium price for their homes but there’s no place to go,” Ralston said.
Builders and developers are far behind in building new homes as the demand continues. Several new condo complexes are underway or are planned, which should relieve that market in a year or so. Some people are investing in fixer-uppers in hopes of capturing a corner of the market.
With the real estate market collapse still a painful memory, Ralston says he hopes agents are mindful of how quickly feast can turn into famine.