COVID-19 has changed many aspects of the way we live our lives. We’re doing more things online, even school. The pandemic has certainly changed what we used to call “normal.”
The real estate industry is one huge aspect that has dramatically changed. 4 Ways COVID Has Changed Real Estate and Does it Affect You?
Surprisingly, buyers are out in full swing! Whether it’s the pandemic or folks moving out of their state because they don’t like how their state is being run, buyers are surprisingly still on the rise. According to the National Association of Realtors, there has been a nearly 25% increase in the level of sales for previously owned homes. There is such a high demand for new homes among home buyers that the market is struggling to satisfy it. This has resulted in homes being sold at inflated prices
More Folks in the Suburbs.
There has been a huge demand from buyers to move out of the big city and into more suburban areas. The New York Times put it this way:
Between March 15 and April 28, moves from New York to Connecticut increased 74 percent over the period a year ago, according to FlatRate Moving. Moves to New Jersey saw a 38 percent jump, while Long Island was up 48 percent.
One way to explain this change is due to the desire to live in more open areas as opposed to being packed together in apartment complexes in the big city. In a new age of social distancing, the thought of living closer together with strangers is less appealing. Add to this the fact that more families are homeschooling their children while public schools navigate back to seated classes, and homes with more room to live, work, and play become even more appealing.
Interest rates are still historically low! This has resulted in an increase in buyers in the market. The average interest rate is below 3% for a 30-year fixed mortgage, according to Freddie Mac, which means more savings in the long term for potential buyers.
Supply vs. Demand
With more people staying in their homes and not moving, it has created a unique supply and demand chain. Builders are struggling to keep up with the demand and resale homes are even coming at a premium. It’s a unique juxtaposition for buyers right now and homes that are listed are quickly snatched up. We’re in such high demand for new homes that we actually are having lotteries for buyers to snag new homes. It’s a crazy environment right now.
Although there are many challenges that need to be met, one thing is clear: buying a home is increasingly more important in the way people adjust to their new ways of living in a COVID-19 world.
Need to buy? Give me a call! I’d love to help you find the right home for your needs in the Mesa AZ real estate market.