2020 has been a rough year with a worldwide pandemic and it has continued into 2021 as well. How has COVID-19 affected the real estate market? Believe it or not, the pandemic spurred many people to want to move. In a way, the pandemic boosted the real estate business. However, the supply of homes for sale has declined.
What has happened in the home real estate market?
The pandemic has brought out much more serious considerations in the residential, acreage, and commercial markets. For instance, here are some of the results:
- More people are working from home, therefore seeking bigger houses with more space for home offices.
- People are searching for more space as well. They also are looking for newer kitchen and more outdoor spaces.
- With the onset of isolation and social distancing, there are more virtual home tours and less people physically visiting houses.
- Home sales went down initially during the spring lockdown but then it rose in the summer of 2020. Home sales have stayed between 38% to 48% of sales in 2019.
- In July 2020 the 30-year fixed mortgage interest rate dropped below 3%, which was the lowest rate on record. By November, the rates dropped even lower to 2.77%.
All of this has created a seller’s benefit in the real estate market. With fewer homes on the market they are selling faster and at higher prices than the norm.
What has been the impact on the commercial real estate market?
The commercial real estate market has suffered from several hits. Commercial real estate depends on the businesses renting space or buildings. What has happened?
- Workers stayed at home for their jobs. Businesses reduced space or closed offices since they were paying for empty workspace.
- Retail stores and restaurants sales declined. Businesses in these sectors from large chains to mom-and-pop operations closed their doors.
- On the flip side, warehouses and data centers flourished.
- Some manufacturing facilities are thriving as well – if they can get raw materials and the components they need in their business.
Now that society is freeing up it looks like some of the adjustments and changes will become more permanent. The work-from-home (WFH) model is catching on for some businesses and many are going to a hybrid of a split of work time between home and the office. The rebound is not as rosy as the housing market, but real estate professionals are optimistic.
Have land sales been affected?
The market for vacant and wooded land, for building, farming, hunting and other recreational use is still full of great potential. Savvy farmers are also savvy businesspeople, so they are watching closely for good land at a good price. Likewise, when home buyers can’t find all the amenities they want in an existing house, they are looking to build a custom home on acreage or at least larger lots.
With the pandemic crisis still evolving, you need great, professional advice when venturing into the real estate market. LAWSON & CO can help. We keep on top of the evolving changes and demands so you won’t have to. Call us at 317-745-6404 or visit us on the web at www.lawsonandco.com to see how we can provide the guidance you need as you pursue a new home or commercial space.
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