by ZACH KAYSER
The coronavirus pandemic is blowing up the Winona home-buying market — in a good way.
In 2020, homebuyers in Winona County set a new record when they purchased a total of 717 homes, according to data from the county recorder’s office. Another record: 28 went for more than $400,000. Of those 28, six of them were sold in the last month, thus breaking yet another record.
“The total number of sales would be even higher if more homes were available for sale,” county recorder Bob Bambenek said in a report to the County Board on Tuesday.
The pandemic, having compelled people to stay inside their homes, is also compelling them to think more about their home and their dreams for it. In 2020 that combined with the practical trend of unusually low interest rates making it easier to take out a mortgage, Bambenek said in an interview Wednesday. New homes were constructed at a rate that was unprecedented in recent records, he said. Despite this, the market remains tight. If a seller has a home that’s in good order, they will likely have multiple interested buyers trying to snap up the house. “It’s just been repeated over and over again,” Bambenek said.
It was a contrast from other parts of the country where the housing market was suffering, Bambenek said. It also contrasted with the time leading up to the 1980s housing crash, in that home buyers are now borrowing more responsibly with fewer mortgages. Asked whether the current boom might constitute a bubble, Bambenek said it was a reasonable question but one better posed to bankers.
The mortgage market had been “tremendous” and “phenomenal” in 2020, said Latonia Schmitt, a loan officer with WNB Financial. Low interest rates were the cause, which in turn was a result of market dynamics and rate setting by the Federal Reserve, she said. With rates staying low, it would be unlikely for the market to suddenly stop as if it were a bubble, Schmitt stated. “I don’t think it’s slowing down anytime soon,” she said.
Jonelle Moore, a realtor with Caldwell Banker River Valley, said part of the reason homes are so scarce in the area could be that people are reluctant to put their home on the market for fear of not being able to find a new one, creating a vicious cycle. The market is so tight that in some cases buyers are expected to drop an offer the same day they view the house, she said. As supply of homes decreases, low interest rates are also increasing demand. “That’s probably the biggest driver,” she said.
The pandemic has encouraged people to remodel homes rather than sell, she said. If anything, the dangers of coronavirus transmission likely put a damper on sales, as it was more difficult to show houses to prospective buyers in a safe way, despite the best efforts of Winona area residents. “Realtors have been careful, the buyers have been careful … but if you have a family still living in the house, and you have people coming through viewing it, there’s some risk there,” Moore said. “So that has probably slowed some of the inventory from being on the market, people just waiting to sell if they can.”
Karen Littlejohn of Keller Williams Premier Realty said she had never seen such a drought of available houses in all her 25 years as a realtor. Asked whether she had an idea why there were so few houses on the market, her answer was succinct. “No, I wish I did,” she said.
Later, she did say she agreed with the theory that low interest rates are behind high demand. As to the idea of people being reluctant to show houses because of coronavirus risk, Littlejohn said strict coronavirus protocols had actually relaxed since the tense days earlier in the pandemic. The unusual housing market would likely persist as long as the pandemic does, she said.
“I think that until COVID is over, it may stay pretty much the same,” she said.