Blog posted On April 28, 2020
The coronavirus pandemic and associated restrictions have significantly changed many industries. Recent data like March’s existing home sales report and new home sales report show sales have slowed during the season that is typically one of the busiest. As states start to reopen and adjust social distancing procedures, the housing market will likely see a lasting impact, specifically in where people prefer to live and how we buy and sell homes.
People May Start to Prefer Suburban Living
In recent years, many Americans have preferred to move into cities rather than out to the suburbs. Major metropolitan areas like New York City, Seattle, and San Francisco have all experienced rapid population increase. Unfortunately, during the pandemic, densely populated areas, like big cities, have been some of the hardest hit. Additionally, quarantining in small city condo can feel more claustrophobic than quarantining in a single-family home in the suburbs or exurbs. Real estate professionals predict home buyers may start to migrate away from city centers to suburbs or exurbs to keep their distance.
Home Builders Could Build Larger Homes
Whether you move to the suburbs, exurbs, or city, you’ll probably want a larger home. After sheltering-in-place for an extended time, you may have realized your current home does not comfortably accommodate a home office or workout space. Many home builders have shifted to building smaller, more affordable homes for first-time home buyers. However, if move up buyers start to leave their starter homes for larger homes, first-time home buyers could see existing inventory open up, and builder preference may shift toward larger homes again.
You May Not Need to Move for Work
To accommodate stay-at-home guidelines, many businesses have shifted to teleworking to allow employees to continue operations from their homes. Businesses who are seeing success with employees working from home may continue to be more flexible with in-office work schedules. If you currently live close to your workplace to avoid a long commute, but your workplace is now open to employees working from home, at least part of the time, that could expand your home search. A longer commute a couple days a week in exchange for no commute other days could allow you to buy a larger home farther away from your workplace,ith enough space for that home office! Additionally, you may not need to relocate for a desired position, if that company allows you to work remotely.
More Homeowners May Invest in Vacation Homes
If you’re not able to move because of your work, your children’s school, or other accessibility-related reasons, and you can afford an additional property investment, you may consider buying a second home or vacation home. During the coronavirus pandemic, some city dwellers vacated crowded city centers for vacation homes in less populated communities. If you have a favorite vacation spot your family visits every year, investing in a vacation home could offset the annual costs of hotels or short-term rental homes. You could also use your vacation home as a source of passive income by renting it when it’s not in use. Before you start looking at a vacation homes, talk with your financial advisor to see if it’s an affordable option for you.
We’re Going to Use More Technology to Buy and Sell Homes
As an essential business, banks and lenders have continued to operate during the coronavirus pandemic as people continue to buy and sell homes or refinance existing mortgage loans. To accommodate social distancing guidelines, many real estate professionals have made the process as digital as they can. Agents are offering virtual or video tours of homes and many important documents are being signed online. While many real estate professionals offered digital alternatives before, the industry is likely going to continue evolving.
The coronavirus pandemic has caused an abrupt shift in the way we live our lives and the way we do business. As an essential service, banks and lenders are fully operational and prepared to serve clients safely during this transitionary period. If you have any questions about buying or selling your home, let us know.