A lot is happening in the U.S. housing market due to the COVID-19 pandemic. The first quarter of 2020 has seen homeownership rates rise to about 65.3%, and mortgage rates drop at 3.23%.
With mortgage rates recording a historic low and home prices edging towards record highs, home buyers are looking for deals that’ll benefit them.
After an unprecedented beginning to the year, as a homebuyer, you may be unsure of what to expect when the pandemic ends. Here are some post-COVID-19 home real estate trends that you should anticipate.
How Will the Pandemic Change the Real Estate Market?
Here are some predictions that you have to look forward to:
1. Home Prices Will Fall, Then Bounce Back
Before the COVID-19 pandemic, US housing market predictions for 2020 showed that home prices will increase by 3.3%.
However, a recent forecast shows that existing housing prices will dip by about 2%-3% towards the end of 2020 and increase by the summer of 2020. This forecast is based on the assumption that the United States GDP will decrease by 4.9% in 2020 and increase by 5.7% in 2021. Note this will not likely apply to new home construction; with increases in lumber prices, new home construction will likely still trend upwards.
Experts predict that there will be a slow recovery post-COVID-19 before prices return to their pre-pandemic levels in 2021. If you’re looking to invest in real estate, this can be the best time to buy rental homes.
2. Home Sales Will Drop
Currently, the existing home sales are down by 15% compared to the previous year. The trend is expected to worsen and be down by 25%. This is because home sales have been inhibited by low inventory and diminished seller and buyer confidence as the effects of COVID-19 linger in the housing market.
The declining home sales can be attributed to a 14.7% unemployment rate as many Americans have lost jobs, leading to reduced income. Many won’t have many to spare for home buying post-COVID-19.
3. Supply of Homes Will Reduce
In April 2020, the National Association of Homebuilders index fell to 30 points from 42 points. This means the pandemic hindered home builders from finishing their projects and starting new ones.
The post-pandemic home real estate market will be affected by low housing supply. Social distancing rules have led to the shutting down of construction. For example, custom home builders can’t work unless they’re six feet apart from each other.
Shortages of building supplies — asphalt shingles, PVC pipe, and other materials— will also be experienced after the pandemic since these companies have been adversely affected by the coronavirus. The limited materials will slow down construction and reduce home supply.
4. Home Buyers Will Prefer Houses in Suburbs
With COVID-19 guidelines asking to stay at home to flatten the curve, homebuyers have focused attention on houses with space and serenity.
Adding to the fact that people are focusing on preparing for the unexpected, post-COVID-19 real estate will see homebuyers looking for homes in the suburbs. Homes in the suburbs are affordable and have enough space for natural lighting and custom interior design.
5. Demand for Homes Will Be Low
The post-COVID-19 home real estate market will see the demand for houses fall. Home sales are predicted to be about 6 million in 2021 instead of the projected 6.3 million. Listings will fall, and over 200,000 homes will be taken off the market.
Most Americans will not focus on home buying after the pandemic. The loss of jobs will reduce their income and lower the house affordability index.
6. The Rise of the Home Office
The work from home orders during the COVID 19 pandemic has enhanced the benefit of the home office. Most home buyers will want their homes to have an office.
Post-COVID-19 home real estate will see home builders constructing houses with offices since working from home is turning out to be the new norm.
7. Virtual Home Viewing Will Soar
Although the demand for homes has reduced, you may still want to purchase a home. With social distancing guidelines restricting interaction, home touring has moved online.
By March 2020, there was a 191% increase in the creation of 3D home tours. The trend is expected to go on post-pandemic because of its efficiency.
Find Your Dream Home with Oberer Homes
Whether you’re looking for a new or move-in-ready home, you need a professional to guide you.
At Oberer Homes in Dayton, OH, we’ll help you find your dream home despite the pandemic. We comply with the health guidelines on social distancing by offering virtual tours.
Contact us today to find your dream home.
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