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Potential Long Term Effects of COVID-19 in Real Estate
What are the potential long term effects for the real estate industry from the COVID-19 health crisis? Here’s what you need to know.
Potential Long Term Effects of COVID-19 in Real Estate
What are the Potential long term effects for the real estate industry from the COVID-19 health crisis?
The COVID-19 pandemic has changed the way the world functions in a snap. People are working, exercising, and living their days from the comfort of their homes. Slowly, some old ways of life will eventually return as the world tries to go back to normal, but some aspects of the pandemic are here to stay. So, what will the real estate industry look like over the next few years? What qualities that we know and love will come back? And what changes will be permanent? This article illustrates the answers to your questions about the real estate industry in the long run.
New Ways to Sell Online
The COVID-19 pandemic has forced everyone to work online. To stay safe, real estate agents have been showing houses through zoom, through 3D online models, and utilizing the internet to ‘show’ the house as best they can without really showing the house. Other ways the real estate industry has made this virtual transition is through online disclosure and closing software. Agents have been using platforms, like Sellers Shield, to have their sellers disclose from a distance. The real estate industry will continue to be online in the long run. Some home sales will take place in person, however, the majority will continue to take place from a distance, due to the impressive virtual software that can give a real-life showing experience. Showing homes in person will later become ‘the old fashioned way’ in real estate.
Pending Sales Trends
The COVID-19 pandemic really beat up pending sales in the real estate market, showing a sudden and rapid decline in major cities. Market data tracked by real estate tech strategist Mike Delprete, shows cities such as Chicago (45% decrease), Tampa (33% decrease), and Philadelphia (58% decrease) took the biggest hits in their pending home sales from late March to early April. However, these trends are climbing back to recovery, illustrating a slow increase in numbers this past month. New listings also rapidly decreased when the COVID-19 pandemic hit in March, but these trends are making a quicker comeback.
Increase in Home Prices
According to CNBC, the national trend for home prices increased 4.4% annually in March due to the low number of houses available for sale. Now, due to the major decline in new listings, home prices are expected to continue to increase. However, this trend won’t last forever, for the market is predicted to bounce back, showing a future increase in new listings for months to come.
The New Home
Homebuyers’ preferences in their new home are going to change due to the COVID-19 pandemic. While homes continue to simply be a place to sleep at night, their new purpose is a bit more complicated. Homebuyers are going to look for a home where they can live the entirety of their daily lives. It is now trendy for companies to give their employees the option to permanently work from their home. That being said, home buyers are going to look for bigger backyards, patios, a room that could function as a gym, pools, and have many other demands in order to really live in and love their new home.
Bottom Line
COVID-19 has changed our daily lives in ways we would’ve never imagined, and we still don’t know how our lives will continue to change. As of right now, we can envision parts of the ‘new way’ of doing real estate. However, we still cannot determine how much more the real estate industry will change due to the continuous impact of the COVID-19 pandemic. No matter the circumstances, real estate will adapt; agents and brokers will still strive to find the best homes for their clients and adjust to the trends that the COVID-19 pandemic has brought upon us. The new, permanent methods in the real estate industry have yet to come.
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