When the Coronavirus pandemic first started taking over the United States, most of the country, including the real estate industry, was not sure of how widespread its effects would be. Most people had a grim forecast on the economy as more and more businesses had to either slow their rate of production or stop entirely. People never really stopped buying or selling houses, but the process to do so became more challenging due to social distancing measures. One of the biggest issues causing delays in buying and selling was a home inventory shortage caused by a lack of materials and staff needed to buy houses. This shortage is coming back into focus and here is how we think it will affect the real estate market.
More people are wanting to move to the suburbs
Scientific data suggests that cities are being hit heavier by outbreaks compared to areas with fewer people, which makes sense logically. With that in mind, people are more inclined to head to a spacious suburban home than a crowded city. According to top agents speaking on the country’s home inventory storage, 37% of agents in the country cite that finding a home in the suburbs is their top moving motivator. However, that doesn’t mean that there will be enough houses available for the surplus of people relocating.
Additionally, new construction in the country is at a slower pace, especially when compared to the rate of people moving. In fact, when asked about coronavirus impacting real estate over time, 59% of agents cited a lack of supply to meet demand as the biggest challenge to the 2020 housing market.
Home buying is getting more competitive, despite high unemployment rates
Many areas in the country had been a seller’s market prior to the pandemic. Lately, the number of top agents reporting that their region has entered into a seller’s market has drastically increased. In the last few months, the country has reported record unemployment numbers due to major shutdowns. However, agents are reporting a major buyer increase. This is why people become worried about the supply and demand shortage.
Another factor pushing people to purchase homes is the drop in mortgage interest rates. This results in making home-buying more affordable to those who are eligible for a loan. Considering this with the desire to move to a less populated area during the pandemic, and you’ve got yourself a competitive market.
Home upgrades and additions are prevalent
People looking to sell their homes during this time are also running into issues. Home inspections, home additions, and upgrades also have issues. Due to stay-at-home orders, home inspections were an issue. Also, due to shortage, home renovations were being halted. This ends up placing a roadblock in front of those trying to sell their homes.
What can we look out for?
In conclusion, we predict the supply and demand shortage to continue to be a pressing issue in the country. If you’re planning on buying or selling, talk to a real estate agent. This will help you understand the situation in your area. For more wellness home and health tips, be sure to keep up with our regular posts on Good Home Health.