The coronavirus pandemic has had profound impacts on the housing market. House flipping and residential real estate investing have risen drastically, with real estate analytics firm CoreLogic reporting that investors bought a record high 28 percent of all single-family homes in the first quarter of 2022.
With the rise of remote work, the type of homes we want to buy has changed with buyers consistently wanting bigger homes in lower-cost areas like Texas.
The initial lull in home sales at the very start of the pandemic quickly turned into a white hot sellers market with buyers offering over asking price and even waiving home inspections.
As the pandemic has become a part of daily life, which of these changes to the housing market are here to stay?
COVID and the housing market
At the very beginning of the coronavirus pandemic housing sales and new construction initially stalled in the face of economic uncertainty. As the stock market stabilized, housing prices picked up.
Record low interest rates, families feeling cramped after a year of sheltering in place, and supply chain issues worsening our housing stock shortage all combined to create an extraordinarily hot housing market.
Houses were under contract for over asking price within hours of hitting the market. Investment firms looking to diversify started buying up housing stock for cash. Desperate buyers started waving inspections and contingencies.
In an effort to curb inflation, the Federal Reserve started raising interest rates in March 2022. Initially the housing market didn’t show any significant changes, but as the Fed continued to raise the rates drastically, home prices have started to stabilize this summer. Homes are staying on the market longer and buyers are starting to have some leverage again.
Experts have mixed predictions on what is next for the housing market but most agree that with interest rates remaining higher, we’re heading away from an extreme seller’s market.
How COVID has impacted the homebuying/selling process
Virtual listings were already standard, but with many taking social distancing recommendations seriously, virtual viewings and closings saw a massive jump over the course of the pandemic. “Listings with video that tell the story of the home were vital,” says Julie Reese a real estate agent with John L. Scott Real Estate in Bellevue Washington.
Industry advancements that make the selling and buying process more convenient are likely here to stay. “While closings are being done in person, many buyers and sellers are opting to not attend for convenience,” says Kimberly Jay, a real estate agent with Compass in New York …….