Real estate has always been a sound investment for both residential buyers and portfolio investors. Every now and then, however, life throws a curveball at the real estate market and sends shockwaves through the industry. In 2020, that curveball arrived in the form of Covid-19.
The Covid-19 pandemic has certainly had an impact on the real estate market across the globe, but just how drastically have things changed? In what ways has Covid-19 affected the market, and more importantly, what do these changes mean for the future?
It’s All Local
In searching for answers to these questions, it’s important to remember that real estate is almost always a local or regional concern. While it’s true that some trends extend to the entire country, such as the 2008 financial crisis, most trends in real estate focus on things happening at the state level.
With Covid-19, different states put differing restrictions in place in an attempt to combat the spread. This had differing effects on real estate in various places as areas with heavier restrictions tended to take a little bit longer to bounce back. Conversely, areas with fewer restrictions may have seen a decline in in-person showings because some people were concerned about exposure.
Not Ready to Move
Another challenge faced by the real estate market as a result of Covid-19 has been the reluctance of homeowners to sell. Fewer homes hit the market during Covid-19, and this led to a big increase in prices. In times of uncertainty, this kind of thing is often seen, but once again, restrictions placed upon homeowners have varied by locality. This means that homes for sale in Lakeland, FL may have sold at different rates compared to homes for sale in Rochester, NY.
At the same time, buyers who were seeking a change of scenery due to Covid-19 had a harder time finding homes for sale. This led to bidding wars in which sale prices rose dramatically alongside lower inventory. In some areas, including Las Vega, NV, home prices saw an increase of over 32%. This has made it all the more important to work with a Realtor in order to put in the best offer.
What the Future Holds
As far as what the future holds for real estate in the United States, the hope is that as Covid-19 winds down in severity and cases become more manageable, restrictions will ease across the country and the economy will begin churning again at a normal pace as opposed to the stuttering and stopping that it has been doing for the past two years.
Buyer confidence is high, and more homeowners are warming to the idea of selling as they plan their next move post-Covid-19. Prices will likely drop as more inventory becomes available, and the market will balance itself to some degree. This may not happen for another year, however, so it’s once again a good idea to partner with a real estate professional to receive the best advice regarding real estate in your local area.