WSJ report compares 2 real estate booms, industry broker looks back on then and now – RISMedia |

Article examines the 2005 real estate boom versus the market dynamics that resulted from the 2020 pandemic

A Wall Street Journal report contrasting the 2005 real estate boom with the record-breaking market that emerged from the 2020 coronavirus pandemic ran front pages of its print publication this week, quoting industry broker Anthony Lamacchia as speaking about the huge differences between the market dynamics 15 years ago that led to the housing crisis, and today where buyers are in a much healthier place financially.

In the WSJ article, Lamacchia, agent / owner of Lamacchia Realty in Boston, recalls that not long after joining the industry in 2004, homebuyers began trading larger, more expensive homes, often with little or no down payment. After the market collapsed, Lamacchia helped the same buyers deposit their homes in 2009, the article says.

Now, he says, the market is dynamically different. Housing demand in the Boston suburbs is stronger than ever, with buyers having better credit scores and more money on a home than in years past, he told the WSJ.

“People put $ 500,000 on purchases worth $ 1 million,” he told the Journal. “You haven’t seen that before.”

He dealt with this in a follow-up interview with RISMedia.

“We are seeing rapid price increases, especially for single-family homes, and I expect these to be even more noticeable this year,” he adds.[Buyers’] The debt to income ratio is much lower and the demand from buyers is significant. “

The challenge, of course, is the inventory. Lamacchia’s company, which had first-time sales of $ 1 billion last year, covers markets in Massachusetts, Connecticut, Rhode Island, New Hampshire and South Florida for single-family home demand.
“We’re seeing the lowest inventory we’ve ever seen,” he says. “The stock of single-family homes has fallen by 60% compared to the winter before the pandemic and was low at the time.”

Condominium sales in various markets are also starting to recover, he says. “During last year when the pandemic started, people avoided condos for the first six months and ran to individual families. We believe this will help balance the market. “

As a result of many people’s switch to work from home due to the virus, he sees the trend of buyers looking for suburban homes with access to more recreational activities to continue for at least the next two years.

“I see a resemblance to New Hampshire in Lake Skiland and South Florida,” he says. “People either want the slopes or the banks and we saw a race into those areas last year after the pandemic started. We saw it subsided a bit after the holidays when COVID-19 had a second wave, and we see this happening again right now, especially in Florida. “

Regarding the long-term outlook, he added, “There is no way that buyer demand could fall enough and supply rise enough to drive the market into some sort of real estate slump for at least the next 24 months,” says. “It’s hard to see beyond that.”

Click here to read the Wall Street Journal article interviewing Lamacchia and other industry perspectives by Zillow, Redfin, NAR, The Urban Institute, and others. The article also examines the boom in credit and new home construction. Note: A subscription is required to read the full article.

Beth McGuire is the online editor for RISMedia. Email her your real estate news ideas at [email protected].