Vaccines have already started to roll out in multiple parts of the globe, but we are still a ways away from truly going back to normal. With that in mind, certain consumer behaviors that have emerged at the beginning of the pandemic remain constant today, and these behaviors are highly observable in the real estate industry.
While both regular home buyers and investors have grown to be more careful in the face of economic instability, the real estate industry is one of the few that has retained normal or even above-average performance. However, certain consumer behaviors have changed the game, possibly even permanently. Here are some of the most common ones:
1. More applications for mortgage and refinancing
Both mortgage and mortgage refinancing rates have hit record lows on more than one occasion last year, prompting many homeowners and first-time buyers to take advantage of the low rates. As such, even with the global economy in shambles, the real state industry remained relatively stable. However, as we near the end of the first half of 2021, mortgage and refinancing rates are continuing to inch upwards.
While there is no way to know if and by how much mortgage rates will increase this year, the rising trend is likely to continue as long as the economy continues to heal. And as more people get access to the COVID-19 vaccine, the employment rate is likely to rise, and both mortgage and refinancing rates will go along with it. For investors and home buyers, this means that the best time to buy is as soon as possible while the rates are still relatively low.
2. Different buyer requirements and wish lists
During these times, the average home buyer’s wish list has likely been affected by the pandemic. With millions of people forced to work from home, a home office is now seen as a necessity more than a luxury. And for many families, more than one home office is a must.
Furthermore, the extended lockdowns have made people realize the importance of having an outdoor space that they can access right in their own homes. With that, more and more home buyers are looking for properties that have large outdoor spaces, as well as certain amenities like pools, gardens, and even sunrooms.
3. Less concern about commutes
Millions of companies all over the country have shifted to a remote working setup at the start of the pandemic. And for many, the change has become a permanent one. That said, many workers are not expecting to go back to face-to-face offices even after the pandemic is over.
For the real estate industry, this change means that buyers are less concerned about commutes, which allows them more freedom to choose a home outside of cities and suburbs. As a result, more buyers are looking for homes in rural areas since they are already working remotely, creating a higher demand for homes in small towns that could also be more affordable.
4. Higher desire for second homes
The interest in second homeownership among Americans has increased since the beginning of the pandemic. This change can be attributed to several factors, including the fact that mortgage rates are at all-time-lows and travel restrictions remain strict (meaning people don’t have anywhere else to go for leisure) to keep the transmission of the virus at bay. However, the most common reason for the increased interest in a second home is the desire to just be in a new house in a new place; a change of scenery that can help break families out of the pandemic rut.
It is uncertain whether the desire for second homeownership will continue to rise after the pandemic, but from what is observable right now, homeowners may push through with their decision to buy a second home once their finances are more stable.
5. Pets affecting home-buying decisions
The isolation, loneliness, and boredom brought about by the pandemic have promoted the desire to own a pet among many American families. That said, homebuyers are taking more consideration about their pet’s (or future pet’s) needs when choosing a home. Features like a big yard, higher fences, and durable flooring are therefore more desirable among homeowners that have pets or plan to have one upon moving into their new house.
These buyer and investor behaviors have contributed to the changes in the real estate market amidst the pandemic, particularly in what kind of houses were most desirable and which locations most homebuyers looked into. While things are still uncertain as vaccines are only starting to be distributed across the country, these behaviors may remain and even grow more common as the world returns to normal.