Sometimes, we can identify trends within the real estate market and extrapolate them forwards, allowing us to make fairly reliable predictions about the future of the industry. But other times, unexpected events come along that nobody could have predicted. The Covid-19 pandemic was of course one such event. Many lost their jobs, many more were locked down in their homes, and the idea of moving seemed unpalatable at the very least – and downright impossible at worst. Accordingly, 2020 will forever be remembered as an annus horribilis for the property market, just as it was for so many other industries (except perhaps for grocery stores and home entertainment streaming companies).
Now things are beginning to get back to something like normalcy, the property market has thankfully picked up again. CityHome Collective, a real estate brokerage out of Salt Lake City, Utah, cautiously predict that, further lockdowns notwithstanding, another total freeze of the property market is unlikely. Although it goes through its bad patches, the real estate industry supplies a product in near constant demand, and house prices have thankfully remained stably growing throughout the months following the very height of the pandemic.
Near Future Predictions
So how can we make predictions about the future of the property market. Well, that is something that perhaps takes a level of expertise not open to the average homeowner. Nevertheless, many of the predictions listed below might feel intuitively correct if you have ever had experience navigating the dynamic property world. But of course, as the Covid-19 pandemic demonstrated, we cannot take any of them for granted.
Less Desperation for Residential Real Estate
Residential real estate actually took something of a boost following the pandemic as people scrambled for a place to securely ride it out (having a tenuous living situation is no fun during a pandemic). That urgency can be expected to come down a bit now. Of course, high-demand properties in cities as well as luxury homes are expected to remain as strong as they have ever been.
Stricter Homebuying Requirements
The affordable housing crisis has been going on for a while now and seems to be showing no signs of letting up. Lower income housing, and even rented properties, are likely to erect more and more barriers against potential tenants and buyers. Things like higher credit score ratings, higher deposits and income requirements will become more widespread and more onerous. At the higher end of the property scale though, this change is likely not to be felt at all.
The Market Will Appreciate
It is as simple as that. And it looks like good news for home sellers across the board. The reason that the market is likely to appreciate is actually in a large part to do with Covid, but it is also related to the housing shortage that is facing the country at the moment. Not only are homes in higher demand, but they have also become more essential as remote working has surged following the pandemic and homes therefore exhibit a higher utility. A third reason the market is likely to appreciate is demographic. Millennials are America’s largest generation, and they are currently in their peak home-buying years.
Increased Use of Technology Will Drive Up Value
In many ways, the real estate industry almost seems made for the application of high technology solutions such as VR headsets (for virtual tours) and AI (for automated viewing estate agents) and so forth. The use of such technology can only be expected to increase.
Whatever happens, what we know for sure is that we cannot take anything for granted. Covid-19 showed us the foolishness of that approach.