5 Ways the Real Estate Market will Change after The Lockdown
Like with other sectors, the real estate market has experienced its fair share of up and downs. The lockdown is forcing stakeholders to reexamine their priorities, as well as the resilience and adaptability of the sector. The duration of the pandemic will likely define the future of the housing market.
Prospective homeowners trying to find a real estate agent may discover the market has changed. Here are some of the ways the lockdown has had an impact on the industry.
The Impact of Social Distancing
Service providers are looking to implement social distancing regulations and uphold the health of their employees. Many real estate industry projects are stalling because of delays in permits and setbacks from their suppliers.
But the effect on different construction projects has not been the same. Assets that hosted large numbers of people have been on a fast decline due to physical distancing rules. Hospitals, lodgings, student housing units are among the hardest hit.
High Mortgage Delinquencies
Lenders have had to adjust their terms to deal with high rates of defaults for unsecured mortgages. Although some of the delinquencies go back to the last housing crisis, the numbers have been rising during the pandemic. That means lenders may adjust their underwriting rules depending on the duration of the lockdown period.
Cash and Portfolio Management
Construction delays can increase the project’s duration allowing for a rise in interest rates. Most investors trying to find a real estate agent are working on a tight budget. Developers are struggling with their cash flows, and that will impact the balance sheet.
As asset owners face reducing operating income, they have to update their portfolio management strategies. Investors have to anticipate the impact the lockdown challenges will have on the market. By building a resilient approach, stakeholders can develop deeper relationships with customers.
Enhanced Tenant-Customer Experience
One way of dealing with the lockdown challenges in the housing market is by adapting information technology solutions. Digital services can provide better payment and faster, more convenient processes for first-time buyers. You can complete important transactions via email, video calls, and electronic signatures.
Implications of Using Digital Solutions
Many people have shifted many of their activities to the virtual space after the lockdown. From buying groceries to looking for products, digital platforms are becoming indispensable. Prospective homeowners can find a real estate agent online and view homes through VR video technology.
The shift to digital platforms has had an impact on the demand for houses. Since most people are working from home, they’ve realized they can live further away from the city. Those locations are more affordable and may have a space for a home office and a larger garden.
According to statistics, 32% of people looking for a home are first-time buyers. The number may fall during the pandemic as interest rises, and the uncertainty continues indefinitely. During such times, investors can benefit by wisely managing their asset portfolios. You can find a real estate agent to work with you to manage the risks during the lockdown.