The real estate market is one of many industries that have been impacted by the coronavirus. In some local markets, especially the densely-populated ones, transactions have all but halted as people learn to cope with the fear and economic uncertainty resulting from the pandemic. However, in other communities, such as in Santa Cruz County, real estate transactions have remained constant as people began seeking new homes in more remote areas to prepare for the changes in American lifestyles. Either way, the real estate market is seeing a shift in trends related to homebuyers and transactions. Analysts have been assessing what the future might entail, and here are a few of the post pandemic trends that we can anticipate.
Increase in Transaction Velocity
Recent research indicates that buyers are extremely interested in transacting in the next twelve months. A study by OJO Labs found that, although many have chosen to delay their planned home acquisitions, they are still looking – 28% were still reporting looking at listing photos, while 25% are even engaging in video tours. Another study conducted by LendingTree projected that 53% percent of homebuyers are more likely to buy a home in the next year. The study indicated four reasons that would explain an increase in the number of homes purchased.
- Due to the government-required shutdowns across the country, people who were intending to purchase a home have been able to save more capital to use as their down payment.
- Individuals are interested in taking advantage of the low interest rates currently available.
- Since the pandemic hit, home prices have dropped, which means people are able to afford a wider range of houses.
- People stuck in smaller spaces found an increased desire to purchase a home.
Home Demands Will Change
Even with increased transaction velocity, the demands of homeowners are shifting. Working from home and spending a majority of time on their property, homebuyers are asking about new aspects of the home that were previously not considered so important. Here are a few:
- Home Offices: Many companies are going to transition to a stay-at-home model; therefore, homebuyers want homes that can accommodate their offices. They are looking for privacy so that they can separate from the family during working hours.
- More Bathrooms: Sharing one bathroom used to be okay, but to avoid spreading germs, homeowners now want a second bathroom for guests to use. This can help them prepare in the case of another outbreak.
- Energy Efficiency: Spending more time at home can be costly, so homeowners want to both save money and the environment and are seeking more energy efficient homes.
- Upgraded Kitchen: As the family is confined to the home more often, homes with upgraded kitchens are in demand to allow for hosting small gatherings and as a community space for the family.
- Improved Lighting: Staying in the home for an extended period of time can have a negative impact on one’s mental health; therefore, to ensure a positive mindset, homeowners are looking for more natural light in their prospective homes.
- Outdoor Space: Enjoying the outdoors is essential, especially for California living. Homebuyers, as mentioned previously, are seeking more remote living with extra outdoor space. This can allow them to accommodate the new lifestyle of social distancing and working from home.
Real Estate Transaction Platforms Will Rely on Technology
In addition to bringing about changes related to the demands of buyers, the post pandemic market will likely bring changes in the actual process of home buying. As a result of the pandemic, there has been an increase in the need for technology to provide an avenue for agents to show prospective buyers their listed homes. This has resulted in more virtual tours and zoom conferences, as well as the use of online sources to execute documents. Every aspect of the transaction has been supported by a technological advance, and the result of these shifts has seen unforeseen benefits to all parties involved in the process. Homeowners no longer have to leave their house on the weekend to accommodate open houses, and instead they only have serious buyers viewing the home. Agents are saving time and resources by vetting out potential buyers from the comfort of their computer. Finally, prospective homebuyers are gaining increased access to more homes from distant locations.
In all, technology is changing the real estate industry for the better, speeding up transaction timelines and improving client satisfaction. The noticeable benefits of this change in dynamics is expected to alter the ways transactions are carried about moving forward, even as states and counties open back up.
The Future is Promising
There is no doubt that the last few months have been challenging for people across the globe. However, as communities begin to open their doors to everyday activities, and as lives begin to normalize, the expectation is that economic rebound will follow– specifically, in the real estate market. It will be both an optimal time for buyers and sellers alike, and those interested in moving are advised to start their process now.