From the office tower to the grocery store, no business has been spared from the long shadow cast by COVID-19. Since the initial March outbreak of the coronavirus in the U.S., waves of stay-at-home orders, shuttered businesses, and concerns over public health and safety have placed entire industries at the whim of an infectious disease that shows no signs of abating anytime soon.
For real estate professionals, the impact of the coronavirus could be felt almost instantaneously. Economic uncertainty and fears about spreading the disease have forced the industry to adapt, resulting in a mix of policies and trends that have greatly impacted the process of home buying.
Here are some of the good, bad, and ugly aspects of the real estate market during the COVID-19 pandemic:
The good: suburban activity
Despite the lingering presence of the coronavirus, people across the country still need a place to call home. With the massive expansion of remote work policies and closed schools keeping families together indoors for stretches of time once unimaginable, evolving home priorities have resulted in a seller’s market. As such, the suburbs and rural parts of the country outside of traditionally overstuffed urban areas such as New York and San Francisco are enjoying something of a renaissance, resulting in intense bidding wars for larger homes outside of the city.
The bad: more barriers to entry
The very act of purchasing a home has become more difficult in the coronavirus era. To preserve social distancing and safeguard public health, sellers and real estate professionals have been forced to adopt virtual property showings in place of in-person open houses. And because of mass unemployment and reduced housing sales, the act of securing a mortgage requires greater scrutiny, placing a premium on higher credit scores and large down payments. Taken together, the added friction to the buying process creates challenging conditions for buyers and sellers alike.
The ugly: long-term uncertainty
The sheer uncertainty of the COVID-19 pandemic has left many uneasy about making a major home purchase. According to a recent survey by the National Association of Realtors, 56% of residential agents have had homes taken off of the market, and 80% have reported having fewer overall homes on the market. Significant concerns over long-term employment and the inability to see houses in person have contributed significantly to buyers’ hesitancy, making it hard to imagine that the real estate market will fully bounce back until the pandemic and its associated economic crisis have abated.