Tuesday, March 23, 2021

Pandemic sends home prices surging, pressuring the rural real-estate market, especially in Central Appalachia

Olivia Morris, 31, wants to remain in her home state of West Virginia, and her dream was to save enough money to buy a small home in Fayetteville. But after a pandemic-fueled real estate boom in the area around the New River Gorge has driven up housing prices, she wonders if she can afford it. (Image from West Virginia Public Broadcasting)
Real-estate prices are soaring across the country, especially in rural areas where city-dwellers are looking to relocate to greener pastures, Roxy Todd reports for West Virginia Public Broadcasting. Many workers are looking to relocate to small towns, according to surveys and real estate data. The infusion of new workers could help local economies (though it could also trigger growing pains).

The phenomenon is the result of several factors. Housing stock is down nationwide; there just aren't enough houses for everyone who wants to move. Lawrence Yun, chief economist at the National Association of Realtors, said that stretches back to the Great Recession. For years afterward, homebuilders weren't building enough homes, and some smaller builders went out of business during the crash, Chris Arnold reports for NPR. Also, many seniors have been hesitant to sell for fear they might get the coronavirus from prospective buyers and real-estate agents.

What that adds up to: "The number of homes for sale is at a record low, with just a two-month supply at the current pace of sales. Once homes do go on the market, they sell fast. Homes are also selling at a record pace — just 20 days after being listed," Arnold reports.

In Central Appalachia, which has seen declining populations for years, the trend has resulted in a surprising real-estate squeeze. For the first time ever, every geographic region in West Virginia is experiencing a housing shortage, Todd reports. Many of the new residents are from out of state, and some are buying second homes as an insurance policy against future pandemics, according to Raymond Joseph, CEO of the West Virginia Association of Realtors.

However, the boom is hurting some longtime West Virginians who now have a harder time affording housing, Todd reports. Yun told Arnold that the boost in home values is great for homeowners, but exaggerates the wealth gap and makes it harder for first-time buyers to afford a home.

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