What Factors Are Impacting the 2021 Real Estate Market?
Since the advent of the pandemic, real estate has experienced a wide range of challenges. According to USPS data, at least 15.9 million people have moved during the pandemic. One of the biggest stories in the housing market has been the spike in migrations from cities. In fact, the number of people leaving big cities far surpassed those moving to smaller ones.
Many factors may influence the decision to move. Here we’ll explore these factors to understand the direction of the real estate sector in the coming years.
1. Continuation of Migration Trends
While the effects of the pandemic have prompted migration, the move to suburban areas is not a new trend. A study shows that the gap in the growth rate between the urban and suburban regions has been closing.
Analysis from real estate companies indicates that the highest rise in migration is in cities like New York. But other smaller cities such as Riverside and San Bernardino have also had outbound migration to suburban areas.
2. Digital Technology and Remote Work
In the last decade, many organizations warmed up to the idea of employees working from home. Even though it was limited to one or two days a week, it set a trend that would become the norm after the lockdown. As digital technology becomes widespread, the assumption has been that it would lead to little human contact. However, technology has made it possible for urban dwellers to move closer to their families. With everything becoming virtual, you can live in a house in a remote location while fulfilling your career obligations.
3. Need to Build Private Sanctuaries
The lockdown has also encouraged many homeowners to create a private sanctuary where they can retreat. If you intend to spend most of your time inside, you want to have an inspiring indoor and outdoor space.
In other words, finding a suitable space for family is another motivation for moving to far-flung areas. Many homeowners are requesting houses with enough outdoor space for recreation from real estate companies. If most of your business or work obligations are virtual, wouldn’t you want a place with a scenic view of the lake?
4. The Cost of Living
Real estate companies also cite the cost of living as one of the reasons for migrating to the suburbs. The maintenance costs for maintaining a city home can be steep. Some home buyers are also looking to move to a region with lower property taxes. The pandemic has compelled many homeowners to evaluate their expenses and relocate to a more affordable location.
5. Preference for Suburban Rentals
People who cannot buy a new home are opting for rentals in suburban areas. Despite the effects of the pandemic, the occupancy for short-term rentals has bounced back. It is a sign that many tenants also want to escape the city. But it also improves prospects for people looking to rent out their property.
Many property owners have been reassessing their options after the impact of the lockdown. According to a Zillow report, 83% of buyers are looking for a single-family home. However, it is worth noting that the migration trends can change dramatically at a moment’s notice. If you need help buying a home or understanding real estate trends, contact Stephanie Ligsay today.