Coronavirus could not curb the need for a new home.
When the coronavirus (COVID-19) outbreak hit the U.S. in February, it took a while to become clear that it was no ordinary disease. Soon after, the pandemic made itself known in a way that would forever be remembered in history books.
Apart from landing a devastating blow to everyday life, COVID-19 also disrupted industries left, right, and center. From hospitality to entertainment, it left its marks everywhere imaginable. But the coronavirus effect on real estate surprisingly didn’t hold as fiercely as people thought. According to the first quarter figures of 2020, the real estate industry made it through the novel coronavirus pressure with consistent demand and high prices.
High Demand = Increased Prices
While the arrival of an unknown pandemic did shake up the confidence of residential real estate buyers, it quickly recovered to see consistent demands across the board afterward. Some of these potential homebuyers were a part of usual traffic from highly competitive areas such as Seattle and South Florida. Whereas, others wanted to benefit from the low mortgage rates that had been brought forward by COVID-19.
According to data shared by the National Association of Realtors (NAR), these requirements seamlessly translated into increased prices across 96 percent of U.S. residential markets.
As compared to Q1 2019, the prices of single-family units rose by 9.7 percent in the Northeast region, while clocking at 7.5 percent for the Midwest, South, and West regions. Similarly, the overall home prices in the U.S. rose by 7.7 percent as compared to the same time last year.
Shortage of Inventory Contributed to Higher Prices
One of the most compelling reasons behind this spike in price was the shortage of inventory, which arose out of sellers not wanting to list their homes during the pandemic. When coupled with high demand, this tight inventory made way for a hike in prices.
According to experts, this coronavirus effect on real estate has continued into the second quarter of the year. While the shortage of inventory remains in place, the demand has also transcended with it. This means that if more sellers don’t list their homes in the near future, the spike in price may continue with this trend. From where the market stands at the moment, it shows no signs of slowing down due to the pandemic.
Realtors’ Swift Response Played a Big Part
While COVID-19 disturbed real estate operations through the first few weeks of its arrival in the U.S., the realtors quickly adapted to new standard operating processes (SOPs) to keep their operations afloat. This included doing virtual tours instead of open houses, holding FaceTime meetings in place of one-to-one consultations, and performing digital signatures as a substitute for in-person notary requirements.
Over time, these efforts helped mitigate the coronavirus effect on real estate, and kept the industry on its feet. With COVID-19 projected to stay in our lives until a vaccine is found, it is not far-fetched to say that realtors would keep practicing the same way in order to keep their operations running.