The coronavirus pandemic has affected our lives in unprecedented ways. Business operations have been disrupted, while most of us are forced to work from home until the situation improves.
The real estate sector is no exemption. Most property businesses are suffering immense losses, especially during the peak of the lockdown. On the contrary, the residential market shows some signs of improvement, particularly in the United States. In July, home sales in the country surged by 25% month-on-month when lockdown measures began to ease. The rise in residential sales was fueled by the low mortgage rates offered to home-seekers.
As the pandemic pushes us to lead a more home-centric life, you might begin to consider moving into a new home or purchasing a new abode as we enter the new normal. Here are some residential property trends that you should look out for when buying a new house after the pandemic:
- The location will become more vital now than ever before.
The COVID-19 pandemic has highlighted the importance of property locations when purchasing a new home. In the post-COVID-19 world, people will become more particular about where they want to live, giving higher regard to safety, accessibility, and the ability of the community to prepare and respond to emergencies.
When buying a new home post-pandemic, consider your location’s proximity to critical amenities such as supermarkets, pharmacies, and hospitals. If you can, try to find out if the community has initiatives in place that are related to coronavirus response and emergency preparedness. Moving into a more resilient and well-governed community will protect you and your loved ones from future emergencies.
- The need for larger and more flexible spaces will rise in the midst of remote working.
The current health crisis has initiated the most significant work-from-home transition, driving employers to implement remote work across their organization due to lockdowns and social distancing. About half of businesses globally have instructed 81% or more of their staff to work from home for the time being. In the U.S., the number of teleworkers reached 62% in April, according to Gallup. Before the pandemic, only 3.6% of the American workforce was working remotely.
According to interior design experts, the rise in remote working could translate to a higher demand for homes with larger rooms. As you begin to spend more time working from home, consider the amount of extra space or rooms available around the house to serve as your formal work area.
- Transactions will take longer and will be done digitally.
Restrictions on face-to-face interactions have resulted in slower turnarounds and operational delays for businesses, even in the real estate department. Such longer transactions will continue even after the pandemic subsides, according to experts. In fact, some residential developers began noticing such delays. For instance, a home appraisal, which normally takes between 7 and 10 days, is now taking around 14 to 20 days to complete.
With this, property developers started transitioning to digital channels to continue servicing their clients. Agents are now using video calling and virtual reality tools to provide virtual tours of properties to potential home-seekers. When buying a new home, don’t hesitate to request a virtual tour of the property if it is viable.
But despite the obvious benefits of technology in property selling, challenges amid the absence of physical interaction remains rampant. Real estate agents must go the extra mile to reassure clients of safer and smooth transactions, even in a virtual setting.
- Home prices will become even more volatile.
During the pandemic’s peak, experts noticed a drop in housing demand as individuals lost their jobs or tried to reduce costs amid economic uncertainty.
However, the U.S. residential market began to improve in July, where home sales increased by a quarter from June. Banks and home lenders began offering low mortgage rates to home-seekers, enticing people to invest in a new property.
You might be tempted to take advantage of this offer, but here’s the catch: amid the falling mortgage rates, home prices are surging and will likely continue to do so even after the pandemic subsides. Additionally, experts have warned home buyers to be wary of overvalued houses. If a house costs more than 20 times the potential annual rent value, that property is most likely overpriced.
Before purchasing a new home, make sure to have a flexible budget that you can adjust as the housing market remains volatile. Using a home mortgage calculator can help you anticipate extra costs and prepare your finances before your purchase.
The COVID-19 pandemic has transformed the home buying process overnight. However, taking note of these emerging trends can help you prepare for your next big purchase once the pandemic subsides.