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The coronavirus pandemic has already altered the spaces we inhabit. Beyond changing the way homes will be built, designed and maintained in the future, COVID-19 will very likely reshape the entire real estate industry. As people reengineer their careers and lifestyles to adapt to a new normal, many will reconsider how, when and where they define home.
The future remains uncertain, but the longer we live with the effects of COVID-19, the more clearly we’ll be able to see the future of home ownership. As the world begins to reopen, here are some emerging possibilities buyers and sellers should consider.
You may live in one home for longer.
Because nursing homes and assisted living facilities were hit hardest by COVID-19, aging baby boomers and subsequent generations may opt to live independently for longer. Not only will this impact real estate markets by increasing the demand for features that facilitate multigenerational living, such as ADUs; it may also change how people finance their homes.
Millennials who have been slow to purchase their first home may take even longer to make an investment, post-pandemic. They may opt to save larger down payments for larger homes offering more flexible space that will evolve with them and their growing families.
In 2018, the average homebuyer spent 13.3 years in one home. However, as more people shift to remote jobs with less expectation to travel or relocate for work, people of all ages may plan to stay in one place for longer. Because how long you plan to spend in a home is an important factor when deciding which type of leverage to use, buyers may seek new and different products to suit their needs.
You may depend even more on your real estate agent.
While a few real estate agents were working to undergo digital transformation in the years before the pandemic, many real estate transactions were still convoluted, paper-laden experiences. Even though most buyers will always prefer in-person walk-throughs, virtual showings offer a beneficial intermediary step for both buyers and sellers.
Technologies like augmented and virtual reality were a lifeline for the real estate industry during strict social distancing regulations. Because they’ve proven so convenient and efficient, these tools are here to stay. Outstanding real estate agents will begin integrating these technologies to digitize sales and elevate their clients’ experience.
With health and safety more important than ever before, buyers will look to their agents for even more valuable information, beyond which home inspections to perform. In the future, strong agents will not only be able to advise their clients about important environmental considerations such as climate change; they may also be able to help each client understand and plan for the epidemiologic and economic impact of future pandemics.
You might flock toward the suburbs… or exurbs.
While job creation and a strong economy made city living more appealing in recent years, high-density areas like New York City were among the hardest hit by COVID-19. Before the pandemic, many people preferred high-rise condos for their convenience, security and amenities; however, the shared plumbing and ventilation systems of high-rise buildings may transmit viruses like COVID-19 and SARS at faster and higher rates.
Cities might look different, post-pandemic. The global shift toward remote work and e-commerce may necessitate more industrial (and less commercial) space. In the absence of the typical city nightlife experiences – attending shows and dining out – many urbanites may cultivate greater appreciation for outdoor experiences like hiking – and reconsider suburban and even rural living. As more people work from home, they’ll also desire more square footage, which is more readily available and affordable in suburban and rural areas.
You might want to buy a second home.
During the coronavirus outbreak in major cities, those with second homes were able to seek sanctuary in safer, less-populated locations. This was especially valuable during the temporary shut-down of hotels and short-term rentals. People who are wary of international travel in the pandemic’s aftermath may also find purchasing a second home for domestic vacationing much more appealing.
Buying a second home can be expensive, between higher mortgage rates, additional taxes, insurance and maintenance expenses. But owning a second home may be possible for more people with the strategic use of the right type of leverage.
Ultimately, research shows that while pandemics incite a temporary pause, the housing market is incredibly durable. While people certainly purchase residential real estate as a sound investment, homes will always be an essential need – even if there is a turn in the market.
COVID-19 won’t stop us from buying and selling homes, but it will change how, where, when and why we buy. By working with a forward-thinking agent and utilizing the latest technology, you can prepare for an uncertain future and make a smart investment in your long-term health and happiness.