One of the most unlikely of events that happened during the pandemic is the sudden surge of the U.S. real estate market. Before the pandemic, it’s true that the market was poised to take off. The COVID-19 scare seems to have done little to dampen the market’s ability to surge.
There was a time before when people were moving into the cities. It seemed that Generation Z preferred to live here, where most of the things they needed are, like the jobs they did to secure their homes. They had a preference for gated communities and condominiums with armed security guards. As COVID-19 happened, however, the shift was obvious—rural and suburban properties suddenly became in demand.
We take a look at why this has become. It might be obvious even to the untrained eye, but there are other reasons for the Gen-Z people preferring to live in suburban settings all of a sudden.
A Surge of Homes because of the Pandemic
It’s a peculiar thing to see—while people were adjusting to losing their jobs, all of a sudden, the real estate market is on a surge. This was because buyers were looking for a more comfortable home for some reason. All in the middle of a pandemic, and even if some of them lost their jobs.
The surge isn’t because of a lowered price since those started soaring. It’s all because of a drive to move out of the urban areas and into the suburban. The pandemic heavily hit urban areas, prompting people to search for less dense areas.
A Loss of Inventory Fail to Dampen
The loss of homes to sell didn’t do anything to stifle the hot buyers’ market. To put things into perspective, houses, condos, and townhomes for sale accounted for 1.5 million in the market, a 21% low from the housing inventory. But that did nothing to discourage potential buyers.
Even the elevated prices did nothing. Sellers were getting multiple inquiries and buyers were calling left and right. Perhaps, one reason that could be cited is the lowest interest rates in history. This was big considering it could help leave hundreds of dollars off their mortgage.
Market Tries to Bounce Back from Losses
The market is trying to get back, reeling from losses because of the pandemic. Lockdowns and restrictions in visits mean they can’t sell like they used to, but that doesn’t seem to be a problem. Consider the urban sprawl that’s happening right now, which has dampened a bit.
The Gen-Z buyers are the biggest purchasers from this market, but they’re not interested in it right now. They’re trying to get out of the cities, on the contrary; however, it is expected that this will pass eventually. People are only currently reacting to the pandemic and a lot of people are working at home, which seems to be driving the search for a better, bigger home.
Bigger Houses are Fast Sellers
Bigger homes are expected to sell because of what they offer — space. The virus seems to thrive in spaces that are cramped. Bigger homes may also offer more places to stay apart, not to mention places where a person can get privacy why they work or study.
These bigger homes selling fast may also depend on the rates staying low. The builders might also go for bigger homes when constructing. That’s the market right now and these may sell faster than their smaller or medium counterparts, whether in the city or the suburbs.
Vacation Homes May Be Hot Sellers
Vacation homes have always been a good investment and sold well, whether during the pandemic or before. It is expected that they may never really go out of style, with those with more cash to spend opting to stay in vacation homes. For one, it’s away from the cramped city centers.
That’s an obvious observation. The market will see people inquiring into properties that are located on the beach, the lake, or in the mountains. It’s a vacation destination, after all, and during the pandemic, the more important thing is that it’s well away from where people usually congregate.
It’s a strange time during the pandemic to see the real estate market thrive. This might be because people have more to spend while they’re working at home. That could also be that they’re looking for bigger homes since they want spaces for their home office. Whatever the reason may be, expect real estate sellers and the market to react to this by offering bigger homes in suburban settings.
