Page 32 - BusinessWest August 31, 2020

factors would collaborate to stimulate virtually all aspects of the housing market and create a unique set of circumstances.
Home sales are strong, again, because of low interest rates even though fewer homes are for sale, said Sherbo, adding that he can’t recall a time when both conditions have happened at the same time.
“I’ve seen rates this low before, but I’m not sure we’ve seen this lack of supply in quite a while,” he said, adding that it’s no surprise that many people do not want to move or sell during the pandemic, so the supply of homes for sale is limited. That creates an environment where many purchase offers are coming in higher than the asking price.
“New listings are selling very quickly,” noted Smith, adding that nearly all the houses offered for sale in early July were sold by early August.
In addition to people moving out of the city and into the suburbs to take advantage of low interest rates, Smith said the demand for second homes is exploding.
“In the last three to six months, prices have increased by 20% or more in areas like Cape Cod or Maine,” he noted. “Second homes are a hot market right now, and because there is a limited supply, properties are on the market for only a short time before they are sold.”
Then, there’s the refi market.
Gunsch said that, in addition to strong new- mortgage activity, Berkshire Bank is doing a high-volume business in refinances.
“Refis account for 52% of our closed-loan production through July,” she said, “while in the prior year, during the same period, they accounted for 35% of the closed loan volume.”
ness Freedom is doing with loan refinancing, he does not anticipate the lack of housing supply to limit the institution’s growth potential this year.
Gunsch said Berkshire also uses an online application process. When an appraisal of the property is needed, only the exterior is appraised to reduce physical contact.
“Loan closings are still done in-person with
“
estate market I’ve seen in years. When the pandemic first hit, I thought it was going to be just the opposite.”
Strong housing-sales activity is even more impressive considering how the entire home- buying process had to quickly
change when COVID-19 hit.
The notion of a real-estate agent walking potential buyers through a house for sale sounds almost quaint these days, as virtual tours have replaced showings, and drive-by looks at a house have become the norm.
“People are buying homes based
on what they see online,” said
Smith. “Many people are not even
going out to the house to see it. In
some cases, particularly for second
homes, they are buying them sight unseen.”
This is probably the best real-
Before COVID-19 struck, Smith said Freedom had limited online mortgage-application capa- bilities, but the virus forced the institution to quickly go all in.
“Luckily, we had the technology to be able to make a fast adjustment to online only, so we were kind of ready for it,” he told BusinessWest.
PeoplesBank launched its paperless mort- gage-application system in October 2019 after two years of refining it. When COVID-19 arrived and disrupted so much of daily life, Sherbo said having a touchless system already up and run- ning made it easier to maintain business levels.
“Our customers don’t have to meet or sign anything in person,” Sherbo explained. “The entire application process can be done online or over the phone. We were ready for this, which was great.”
everyone wearing masks and following social distancing guidelines,” she added.
Critical Deferrals
A serious concern at the beginning of the pandemic was the potential for mortgage delin- quencies to spike due to homeowners affected by financial and health issues. In April, Gov. Charlie Baker signed into law a moratorium
on evictions and foreclosures on consumers through March 2021.
Meanwhile, those who are struggling with COVID-related issues are encouraged to contact their mortgage holder to defer payments. The law makes it clear that, by deferring, consumers merely extend the length of the mortgage with-
JEFFREY SMITH
Smith added that, thanks to the robust busi-
Mortgage
Continued on page 33
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