Musings from the Mountains
Today I want to mention a few happenings in real estate today, and a bit of my opinion about short-term rentals in our area.
Typically, home buyers with FHA mortgages pay lower down payments than home buyers with conventional mortgages. This results in their having to purchase Mortgage Insurance until they achieve an agreed upon amount of equity. The Department of Housing and Urban Development recently moved to lower Mortgage Insurance Premiums beginning in March. This reduction in premiums would save the average home buyer $800.00 in their first year of home ownership. With interest rates in the 6% range currently, this would be welcome savings for many home buyers.
We all know that home prices have climbed considerably in the last few years. According to the National Association of Realtors® Chief Economist, Lawrence Yun, home prices nationally have risen 42% in the last 3 years. However, it seems that locally, home prices have stabilized, at least for the time being.
The good, bad, and ugly of short-term vacation rentals: Since the Covid outbreak of 2020, more vacationers have come to prefer renting a vacation property as to staying in a hotel or motel. Originally this was probably driven by vacationers wanting to avoid crowds and come in contact with as few people as possible. Also, others working remotely during the pandemic wanted a place to stay away from crowds. So ultimately, many investors recognized this trend and purchased vacation properties here in our beautiful mountains. A good portion of our homes available for sale were sold and converted from single family residences to short-term vacation rentals. This has contributed to a shortage of homes for sale in our area for both full-time residents and second-home purchasers. Real estate prices are driven by supply and demand. If you lower the supply, and still have demand, prices ultimately rise. Do we have too many short-term rentals now? The jury is still out on that one.
Do you have any real estate questions? If so, please let us know. We are happy to help.