COVID-19 and the Housing Market: The New “Normal” is Changing the Way We Live and Move
by Sarah Pickens
on Wednesday, February 24th, 2021 at 9:45am.
We’ll start with how all of these articles start when it comes to the pandemic: 2020 was a long and hard year. And while things are looking up in 2021, we still find ourselves at home and out of the public arena. But before you think this is going to be just another tale of pandemic woes, read on. We have some good news and interesting insights for all you homeowners and aspiring homeowners out there despite our COVID reality!
COVID-19 is Pushing Us to Define Our New “Normal”
Usually it goes like this: You have an apartment and when your family expands, or you find yourself in a more financially stable position you get a house close to where you work in a nice enough neighborhood. Then as you get older, switch jobs, or reach a big benchmark in life you continue to find the “next” home for each stage. It may be as you near retirement in the quaint neighborhood you’ve always wanted to live, or it could be the home with more yard space for the kids and pets to run around endlessly. It’s usually a fairly predictable pattern.
You may be wondering how COVID has impacted the market, and in the most important ways, it’s still reflecting that same trend – it’s just much more sped up. An article by Forbes Magazine expressed the trend more accurately: “…Americans [SIC] moving in the midst of COVID-19 may finally be expressing a more fundamental preference for how they reallywantto live instead of where they haveto stay because of their job location or where their kids go to school.” Warmer, safer, smaller, less regulation and lower taxes are the newest buzzwords on the market as we try to answer questions that only a global pandemic could bring up: Will we always be able to work remote? What sort of places can we exist in outdoors while social distancing year-round? If I shop online, why do I need to live so close to all these retail stores? Why live in metro areas if museums, restaurants and bars aren’t opening back up anytime soon?
Combine these questions with the millennial generation ageing into their homeownership phase and we’re seeing more and more that migration from metro and more populated neighborhoods to suburbs and smaller towns is becoming the norm.
Despite the Pandemic, Home Buyers Are Still Eager to Move!
With Realtors® and real estate agents picking up so quickly on managing safe and healthy transactions via virtual showings, online forms, and e-signatures, the market has continued to operate without too much of a slow-down. But home buyers are also finding that having an agent is more important than ever since the competition for the low number of homes on the market is fierce.
New Construction Has Experienced a Slow-Down
Unfortunately, the pandemic has seen an increase in lumber prices and therefore a decrease in new construction homes. As the demand for homes has remained relatively unchanged compared to years prior to the pandemic, the slow-down of new construction homes has left buyers competing for listings. But for sellers, this can be a plus!
Homes Have Experienced Their Largest Equity Gain in Years!
The average home as of Q3 in 2020 has gained an average of $17,000 in equity (according to Homeowner Equity Insights Report - CoreLogic)! That’s the largest average gain we’ve seen since Q1 of 2014. So, if you’ve been thinking about selling, now’s the time. While these gains are amazing assets, they may not last. Once lumber prices fall and new construction begins to meet demands again, equity may see a slight ebb.
It Begs the Question: What’s Next?
As we adjust and re-adjust to the day-to-day of our lives during COVID-19, we find ourselves seeing the world in a new light – a light that revolves around the home in which we eat, learn, work, exercise and even shop. And for the foreseeable future, that is likely to be our continued reality. And that means where we choose to live will be more important than ever!
Wondering what your home is worth in this new market? We offer a free home eval! And don’t worry, you aren’t obligated to us in any way. Just fill out our quick form and we’ll send you your results specific to your home and neighborhood!