After more than a year dealing with Covid-19, we can begin to see the impact the global pandemic has had on the residential real estate market. Real estate agents all over the country have had to adapt their strategies to implement social distancing and constantly evolving CDC guidelines. Looking back on the last year, we can see how Covid-19 has changed the housing industry, and how real estate professionals have used what they learned in 2020 to keep their businesses afloat amongst all of the changes.
Reduced Home Sales
One of the biggest observations that industry professionals have noticed is the decrease in home sales since the pandemic. Real estate typically ebbs and flows based on the economic health of the area. But the pandemic and stay-at-home orders made it significantly more difficult for buyers to get out and discover new homes. Home showings decreased, which meant home sales also decreased. It also made sellers a lot more hesitant to allow strangers into their homes. The housing market saw 25% more homes taken off the market during the pandemic compared to the previous year, which meant there were fewer homes available to buy.
Demand Recovers, Supply Has Not
By the end of May 2020, home sales started to slowly increase. Online searches for homes were inching toward pre-pandemic levels, but the supply wasn’t following suit. Home showings started to increase, as people learned how to safely host an open house while still maintaining social distancing guidelines. But although buyers were ready to get out and start their home search again, sellers were a little more hesitant. New listings struggled to meet pre-pandemic levels, and inventory continued to decline. Many sellers were worried that the uncertainty of the economy would make it difficult for them to buy a new house once theirs sold, so they held back on selling and waited to see how the housing market would recover.
Job Losses Have Long-term Impact On Housing Market
Covid-19 has caused millions of people to lose their jobs. It has shut down local businesses that have been operating for generations and forced large corporations to let go of a large percentage of their employees. It has also made it increasingly more difficult to find a job, which means millions of people are struggling to pay their current mortgages. Unlike recession periods we’ve seen before, this one was not caused by a traditional housing crisis. Instead, it was caused by steep job losses and an unexpected downturn of the economy. The uncertainty that surrounds a global pandemic is unprecedented, and until the economy recovers and people can get back to work and back to making money, the future of the housing market will still be unsure.
Covid-19 has also changed the way we think about work. Working from home has replaced working in a traditional office for many people. This shift will undoubtedly impact what buyers look for in a home. Recent trends show that buyers are prioritizing individual amenities (private pools vs. community pools, swings in the backyard vs. public playgrounds.) Homes with space for a home office will appeal to modern buyers more than ever before.
When people are less concerned about buying a property close to their downtown offices, their options for homes expand. Neighborhoods and areas that were previously deemed as “too far” or “too rural” now become a real option for those working from home.
The Takeaway
If there is one thing we know as we navigate a real estate market through a pandemic it is this: nothing is certain. Covid-19 has impacted different cities in different ways, and while some cities are seeing an increase in home sales, others are still deep in a recession. Market analysts are hopeful that people will feel more confident buying and selling homes when the job market is healthier, but it’s still uncertain as to when that will be.
Real estate agents have quickly adapted to a whole new way of doing business and will continue to do so. Flexible, quick-thinking, and creative, agents all across the country have used this time to invest in continued education to help them navigate the housing market. Mbition offers online courses and classes to help you better serve your clients, even during a global pandemic.
