Spring is the start of home-buying season, but this year, the pandemic and its subsequent stay-at-home orders have marred the housing market.
As lockdowns were initiated and people began to shelter-in-place, I noticed quite a few changed in my business that I’d like to share with you. These uncertain times, coupled with the stay-at-home orders, have altered the housing market significantly.
It remains to be seen if these changes will be permanent, but it’s certain these trends will be the “new normal” for several months and years to come.
Tech Takes Over
The most obvious change that the housing market has seen is the uptick in the use of technology.
While technology was already playing a big role in real estate, the pandemic has made in-person showings impossible. Virtual paperwork already replaced physical piles of mortgage documents and forms before the pandemic, and now, real estate agents are giving virtual tours of properties to interested buyers.
While the virtual movement in real estate has taken off, I don’t think that virtual touring will stick around after the pandemic is over.
Deciding to purchase a home is no small decision, and I doubt many people will opt to take a virtual tour if they can safely see the home in person.
However, the use of technology will allow home sales to continue until coronavirus is no longer a threat to public health.
A Shift to Suburbia
While urban living has been trending for many years, I believe that home-buyers will shy away from city living to avoid the effects of future pandemics.
Cities like New York have faced stricter pandemic protocols and higher death rates than rural areas. The urban housing market will slow down as a result of the coronavirus pandemic.
Social distancing is hard when you live in one of the most crowded cities in the world like New York. It’s a lot easier to avoid others when you’ve got acres of land in between you and your neighbor.
Expect to see a preference for rural and suburban homes for many years after the pandemic is over.
Fewer Buyers, More Renters
Unfortunately, the pandemic has left many people unemployed.
Not only are there fewer qualified home-buyers, but people are also holding onto their money and taking fewer risks in the face of uncertainty.
Those who were planning on purchasing a house this year feel hesitant to take on the financial commitment of buying a home. Many people will continue to rent until they feel more certain about their financial future.
Plummeting wages coupled with fear and apprehension of the future will reduce the number of home-buyers for several years to come. Once people regain their financial and mental stability, you can expect to see an increase in home-buying.
More renters means you’re always safe with your investment, as long as you maintain your emergency funds.