Not long ago, the housing market was booming, thanks to a strong job market and low mortgage rates that enabled the buyer to turn to real estate. However, at the turn of the year, something unpredictable in the form of a pandemic occurred and erased all housing market confidence.
Real Estate Market Analysis
Looking at the speed at which homes were in demand as compared to inventory, we saw new record sales in February. In one of Realtor.com’s report, it was mentioned that although April saw a big dip in sales, February still managed only a small decline since October last year.
From late 2019 to early 2020, due to lower mortgage rates, a substantial housing market activity initiated. However, come February, early signs of coronavirus spread took its toll mainly on markets that were severely hit hard by the outbreak.
Real Estate Market Forecast
According to recent statistics, housing growth will see a flat curve, while inventory is expected to remain reserved specifically at the entry-level price point. As far as mortgage rates are concerned, they are expected to bump up.
As an outcome, tight inventory along with rising mortgage rates will result in weaker sales. This will potentially impact mid-size housing market as buyers will prioritise affordability.
For people who are in their retiring ages and own large-size property or housing, they will prefer to sell and move to a smaller assisted living, this will pave way for small and medium sized housing property.
With the outbreak, it is now time to transition into the digital and virtual world. Property agents now use the best technology to make listings easier for potential home buyers. 3-D tours and virtual presentations should now be the main focus. This will also allow buyers from other states and countries to be able to see their property and finalise.
Home inventory will remain low, despite plenty of new construction.
The Overall Impact of the Pandemic
The pandemic forced many households to question whether the household still serve their lifestyle in their present home. Today, many homeowners want bigger yards that are separate as well as private.
The demand for new homes and even secondary residences soared this year as we all find ourselves spending more time at home - and we expect it to continue in 2021 as expectations shift in response to Covid-19. Majority of buyers don't expect a return to normal. Alternatively, they foresee a modern normal in which they live, work and entertain differently than ever before. Housing interior needs have also changed with the pandemic. People are now looking for homes with office space, an area in the house to equip with gym machines and yoga mats and a room that is distraction proof for audio and video conferencing. In other words, pairing comfort with function.
As it stands, both supply and demand have fallen off and the real estate business has somewhat subsided for this year. Real estate numbers show that demand may have fallen significantly more than available supply. The tables have turned for the first time in a decade.