The Seven Side Effects of Real Estate During COVID-19
The global pandemic of COVID-19 has created numerous effects on the lives of our fellow Californians, as well as a peers abroad. These effects are likely to persist once vaccinations become more widely available. Regardless of how it all plays out in 2021, the way buyers, sellers, and agents do real estate has shifted. Take a look at a number of things to watch this year.
Buyer’s are looking for more in their home. You’ve likely felt the walls closing in on you after a year of stay at home orders. Buyer’s who were already feeling short on square footage are seeking more from their new properties. Square footage, additional rooms, and larger lots (especially home’s with pools) have all gone up in demand.
A disparity in our economy is creating two economic realties. If you work in a tech field, or happen to be associated with real estate, chances are you’ve had one of your busiest and successful years in business. The opposite is true for those who work in service based industries. Hospitality, food service, and tourism have all felt the squeeze, and as the pandemic erodes away savings and emergency funds, those buyers will likely be handicapped in the market for quite some time.
There has been an exodus from the urban lifestyle. No longer are buyer’s flocking to smaller units and lots in trade for a bustling metropolitan, and rather they seek the comfort and smaller price per square foot provided from suburban living. It will be interesting to track this trend and see how reduced in person services and more work-from-home positions transition out of their once dense, urban landscape.
The way buyer’s are previewing properties has greatly moved online in the last decade, but with the restriction of private showings, and the massive reduction in open house opportunities, buyer’s are now relying more than ever on online marketing. Some tools that have gained a lot of popularity include google street-like virtual walk through as well as agents performing virtual walk throughs via Zoom, FaceTime, or similar.
A focus on public health, and maintaining the sanctity of one’s home while occupied, has began a trend of sanitation between showings. In addition to state-directed guidelines about who can see properties and what precautions are to be made, seller’s occupying properties for sale certainly have reason to be concerned for their health too. Who’s to say a buyer may be COVID positive, but not showing symptoms? Hand sanitizer, anti-virus wipes, and other cleaning products are typically there to greet buyers at the front door. And as buyer’s spend more time at home, the days of large gatherings out and using public spaces like gyms are now being taken into consideration on buyer’s wish lists.
The demand for second homes has increased. Where buyer’s may have had funds budgeted for family vacations, many are now allocating that money for down payments on second homes. According to CAR, resort markets such as Tahoe, Mammoth, and Palm Springs saw sales more than double in the second half of 2020.
Overall demand is high, and supply has stayed low. Hesitation from seller’s to list during the pandemic have exacerbated an already low supply and sky high demand. In some areas of CA, median home prices saw an increase of nearly 17% primarily driven by simple supply and demand. It is likely this disparity will continue through 2021, and most stats show the state is short about 3 million homes to meet the demand of our market.
