Here in Plymouth single family real estate prices have risen steadily overall since 2012 (see chart which was last updated at end of February 2020). This has been due in part to high demand, low inventory, low interest rates and down payment options, and general inflation as well (an increase in the money supply - $). Home-owners have enjoyed price appreciation for many years.
Up to the present moment of this writing, we have a very low supply of single-family housing on the market in Plymouth (A 5 year low, due to the health crisis from COVID-19; please see chart below). Along with the low supply of listings, we still have very strong demand (5 year high at this point in the year), which is awesome for owners/sellers (again, please see chart below). The economic indicators of the Plymouth real estate market still look good at the present moment.
However, a word of caution looking forward, this could change in the coming months/years due to the economic consequences of the coronavirus that have not yet fully taken hold. In particular, if less buyers are in the market due to job losses, business closures, and/or banks tightening lending guidelines (as mentioned in last blog post), this will lower demand and buyers’ purchasing power. On the flip side, if more sellers have to enter the market due to the inability to pay for their mortgage/housing expenses should they experience a job loss, loss of business, or just a reduction in pay due to a cut in working hours, this could unexpectedly add to the supply of housing available, and change the supply and demand factor as well.
None of us know the future, however I simply want to point out that if you are in the market to purchase a home, especially if you are a first-time buyer (or not selling and buying real estate at the same time), you want to be extremely cautious and think long term. During the last down-turn in real estate prices around 2007 through 2012 (see first chart above), if you had purchased a home during the preceding years, you would have had to wait about 10 years +/- for the market to get back to the price levels in which you purchased. This is something buyers in particular should keep in mind as we all try to navigate the real estate market moving forward in the months to come. Let's all hope that the economic consequences of this virus are as minimal as possible, especially to our small businesses.
Charts used are from MAR/PASS (state and local real estate associations) and MLS.
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