The Pandemic Changed Our Perspective on Housing
Does your home feel comfortable, like your favorite sweatpants, or more like last year’s jeans—too tight and out of style? Worldwide, people found themselves with plenty of time to think about that question during the COVID-19 pandemic lockdowns.
Families and pandemic partners looked at their homes differently when it suddenly became necessary for everyone in the house to work, learn and play in the same space. The open concept kitchen and living area became a blessing or a curse, depending on how many students set up their laptops at your dining table.
How many bedroom corners and closets did you sacrifice to carve out a little adult-only workspace to hold Zoom calls?
We’ve learned that a balcony is no substitute for a yard. A yard—where you can have a couple of friends or family members over for a relatively safe, socially distanced, sanity-saving visit.
Some People Moved Because of the Pandemic
A Pew Research Center survey conducted in early June 2020 reports that almost one in five Americans either moved or knows someone who moved because of the pandemic. Almost 37% of the young adults surveyed (ages 18-29) suffered pandemic-related moves, mostly due to job losses or college shutdowns. Of those who reported relocation because of the pandemic, 61% said they moved to live with family.
Those who didn’t lose their well-paying jobs are likely reconsidering their living situation. Around 21% of survey participants with a household annual income above $150,000 said they knew someone who moved because of the pandemic. By comparison, in households with an annual income below $30,000, only 14% of participants said they knew someone who moved because of the pandemic.
The Pandemic Is Speeding Up Plans to Move
Older Americans often move from big cities to more affordable retirement homes and warmer winters. Millennials have now reached the stage of life where marriage, kids, and the need for more space outweighs the appeal of urban amenities. The U.S. Census Bureau recently reported statistics that, for the fourth year in a row, the number of millennials (ages 25-39) living in big cities continues to fall.
The pandemic didn’t start the shift to the suburbs. The pandemic pushed wide open a door that Americans had already been steadily trickling through. Thanks to the economic and social conditions caused by the pandemic, more people are choosing to move out of big cities this year compared to last year, and sooner rather than later.
The Pandemic Changed Our Need to Live Close to Work
The National Bureau of Economic Research reports that 37% of American jobs can be done from home. For those whose jobs survived the economic downturn and became permanently remote work, it is no longer necessary to live “close to the job”. These remote workers, along with renters from expensive urban centers, are leaders of this year’s movement to the suburbs where they can buy or rent larger homes for less money.
Even before the pandemic, according to Forbes.com, businesses had begun looking to move their headquarters out of the expensive downtown office buildings of large coastal cities like New York City and San Francisco. With fewer employees now working daily in the office, businesses can consider not only relocating but also downsizing their centralized corporate spaces.
Smaller cities with a highly educated workforce, a growing tech sector, lower taxes, and pro-business regulations are attracting corporations. Cities like Charlotte, Nashville, Salt Lake City, and Austin expect occupancy of commercial office space to grow more than ten percent over the next five years.
These smaller cities are also attracting home buyers to their suburbs. Residential buyers still want to be close to urban centers, but not as close as they once needed to be for a daily commute. They are willing to increase their commute in exchange for more square footage at a lower price.
What the Pandemic Has Done to Real Estate Markets
About 9% of the Pew Research Center survey participants moved to purchase or rent a new home. Despite causing a recession and record unemployment, the pandemic increased demand in a nationwide housing market that was already low in inventory. Sellers are seeing their home prices continue to appreciate. Potential buyers are coveting the low mortgage rates.
The National Association of Realtors analyzed the search habits of users on its popular website, realtor.com, comparing consumer habits before and after the pandemic started.
Here are some important insights from their report:
Housing Market Recovery Requires COVID-19 Containment
Realtor.com hosts a weekly Housing Market Recovery Index, categorized by region: West, South, Midwest, and Northeast. This index tracks the link between a region’s successful containment of COVID-19 and the pace of recovery of housing inventory and home sales.
Regional real estate markets cool down when buyers and sellers suspend their plans in response to local spikes in COVID-19 cases. Despite fears of a third nationwide surge of COVID-19 cases predicted for the fall and winter months, residential real estate markets remained strong in October.
“I’m optimistic about Florida’s housing market recovery, even if there is another COVID-19 surge this winter. We design Florida homes to take advantage of the year-round warm weather, so we’re in a good position to maintain a socially distanced, indoor/outdoor lifestyle. That’s what home buyers are looking for now,” says Tom Stallard, owner of State Title Partners in Melbourne, Florida.
Tom continues, “The Florida market is attractive to both residential and commercial buyers because we have reasonably priced real estate and low taxes. People moving here from out-of-state can find all the home features they’re looking for at an affordable price.”
State Title Partners is a leading real estate title company in Brevard County, Florida, providing buyers and sellers with title insurance, title reports, and escrow services. If you need a settlement company who can manage every aspect of your Florida real estate closing, please contact us. You can get a quick quote or place an order on our website, statetitlepartners.com. We are happy to answer questions and provide additional information by email at tom@statetitlepartners.net or you can call our office at (321) 728-3836.