Focus Five - Housing and Lending

Gretchen:
For today's Focus Five we have five surprising facts for you about the housing and lending markets during the pandemic.


Gretchen:
All right, so our first fact is good news for buyers and sellers alike. Now, while it's no surprise that interest rates are historically low, what may surprise you is how that translates into actual buying power. So right now buyers have 10% more buying power than they did in September of 2019. What does that mean in terms of dollars and cents? That translates into $32,000 more buying power this year than last. And so, like I said, that's great news for sellers and buyers alike. Buyers who need to make competitive offers have that extra money. And sellers who are looking for top dollar for their homes are actually getting it.

Sladja:
Number two is volume and prices are not decreasing. Based on the recent reports in the Northeast area, in the month of July, we've seen 25% increase in homes that went under agreement, which is actually 20% increase over 2019.

Sladja:
At the same time, year over year reports for Massachusetts are showing that single family home sale price has increased by 8%, while these on the market decreased by 6%. So things are happening a little bit more quicker. We are not seeing the same appreciation in condominium sale price, which is great news for first time home buyers who are looking to get into their first home and who are looking for a slower appreciation, but at the same time, more buying power that they suddenly gained with all of these changes.

Gretchen:
That is great news. So our third fact for you is the fact that we may not have a slower fall market like we typically do. So I'm sure everybody's heard about the frenzied spring market of buying and selling that we have in the Boston area. But because we still have high buyer demand, low interest rates and low inventory, we expect that pent up buyer demand to last longer into the year. So we might not have that sleepy fall season that we would normally expect. This is great news for sellers.

Gretchen:
So sellers, if you were thinking about waiting until the next spring market to get top dollar for your home, think again.

Sladja:
And what about foreclosures? Everyone expected that we're going to see a lot of foreclosures coming in. Right? Are we seeing?

Speaker 1:
No.

Sladja:
That there are a few reasons why this current crisis is unlikely to produce the same wear of foreclosures that you've seen in 2008. And these are some reasons why. First of all, housing market is much stronger than it was a decade ago. And at the same time, housing market is not the one causing the crisis. So yay housing market.

Gretchen:
Yay housing market.

Sladja:
Moving on,, seriously. Accompanied by more rigorous lending standards, we are experiencing a household debt to income ratio being at four decades low, while at the same time household equity ratio being at almost three decades high. What this means, people are able to leverage their house equity to be able to stay in their properties and to avoid foreclosures by either selling their properties or doing refinancing.

Gretchen:
That is a wonderful fact. And our last, our fifth fact for you that may surprise you about the housing and lending markets during the pandemic, and this is a really fun fact. Vacation home sales are on the rise in Massachusetts.

Gretchen:
As you know, we have great vacation areas. Cape Cod is leading the charge in national sales volume, as are the Berkshires. And what we're really seeing is a lifestyle change here. These vacation home sales are signifying that now that people know that they can work from home, that they can go to school from home, that there are travel restrictions they're trying to avoid and worries about quarantining, purchasing a vacation home is the perfect way to make sure that you have a great place to spend your downtime.

Gretchen:
So thanks for listening to our Five Fun Facts and until next time stay tuned and stay focused.

Sladja:
Stay tuned and stay focused.