The Real Estate Changes that Came with 2020
2020 brought a lot of unknowns (to say the least). The pandemic and COVID-19 dominated the year’s headlines in the real estate industry. How have these changes impacted real estate trends in 2021? Keep reading for a full breakdown of the real estate changes that came with 2020.
This isn’t a surprise, but when it comes to real estate and COVID-19, the market is loaded with economic uncertainty. This comes from several angles, however. First, from the buyer’s perspective, there is uncertainty regarding the market, their job, home values, etc. The list goes on! Working with clients can prove to be tricky in 2021. And when it comes to inventory, there aren’t enough homes for sale to meet buyer demand. In fact, housing supply hit an all-time low in September 2020. However, this could change in 2021. With new construction coming for sale, and homeowners forced to sell due to job loss and other factors, there’s a strong chance we’ll see more inventory. It’s also hard to know what the future will look like when it comes to lockdowns, capacity limits on restaurants, and other COVID-19 safeguards. This could impact property values and influence whether a homeowner decides to sell or not.
Housing prices are still going up
Housing prices have surged in the last half of 2020. COVID-19 has certainly boosted the amount of people looking for single family homes thanks to local stay-at-home and quarantine orders. Combined with the record low interest rates, both of these components contribute to the rising housing prices. In fact, in October 2020, national median housing prices were up 12% over 2019. We don’t see this changing much going into 2021 with housing prices remaining high — great news for sellers. We expect to see this trend continue in 2021.
There has clearly been an overhype about the amount of people leaving major cities for suburban areas. It’s happening, but not at the extreme levels currently described. It makes sense considering the available technology and ability to work remotely due to the pandemic. It’s no longer about where people need to live, but where they prefer to live.
One of the real estate changes that came with 2020 is the increased desire for suburban areas. Homeowners generally want to be close to the office, but prefer larger, more suburban, homes in preference to downtown areas. Going into 2021, one of COVID-19’s largest effects is homeowners’ push out of high-density areas. Think more competition for homes in these areas and a change in the way your brokerage markets to potential buyers.
Processes will continue to change
The real estate industry had several obstacles to navigate at the onset of the pandemic. For example, remember when real estate was questioned as an essential or nonessential business? We’ve seen an obvious reliance on virtual showings and loss of open houses. Brokerages need to remain flexible and be open to adopting new technology especially while virtual showings are critical. The rules for showing homes and closings have varied widely, but it’s important for brokerages to stay up-to-date with local, state and federal health regulations and real estate guidelines. The processes for safety and successful sales will continue to change in 2021. Above all, the priority is to keep your team healthy.