Arguably, the biggest surprise resulting from the Coronavirus pandemic is the huge demand of homes from buyers. Sales of newly built homes hit the highest level in 14 years a few months ago. But at the same time, the builders’ supply dropped. More people are selling real estate during a time when a life-threatening pandemic and potential recession is on the horizon. But why is this?
A Reduced Need to Commute
The pandemic hitting resulted in more individuals working from home. There is a chance that the pandemic impacted the housing market because individuals did not need to live closer to the office. The result? A reduced need to commute and an increased desire for a larger and more comfortable home space. We have to remember that if people start to go back to the office after the pandemic, it’s unlikely to be 5 days a week. Commuting isn’t going to be as necessary as a result. This will result in more people purchasing for comfort rather than necessity. This will have a direct impact on an increase of properties being purchased in the suburbs.
The Property Sellers Are Also Buyers
The pandemic has created a huge demand from buyers. While there have been fewer homes for sale on real estate lists since the start of the pandemic, people are looking to vacate their homes which makes them buyers. As new listings hit the market, another buyer will be added to the mix.
A Need for Quick Income
Perhaps one of the more visceral results of the pandemic, individuals are now looking to sell real estate as a way to streamline their lives. As home prices soared in the last year due to high demand, this has resulted in low interest rates, but also a low supply of homes. This has made home ownership out of reach for many Americans on a lower income and even some middle-income families have been struck by the pandemic.
A Demand for More Comfort
When home sales increased in July, this was partly due to buyers looking for a more comfortable home in light of everything they’ve gone through. Due to a high rate of unemployment and the fact that individuals are in the midst of a global pandemic, this has hit home for many people and made them consider the most important things in their lives. Comfort is priority number one in difficult times. But as a result, people are rush buying. As more people are looking for a comfortable home, this can be used to the seller’s advantage.
Living through turbulent times is never easy. And as the pandemic has resulted in an upheaval in so many aspects of modern life, it is surprising to see a surge in home sales. When house sales shot up in June, it broke a record for the biggest month-to-month sale spike. Completed home purchases rose by 20.7%. The fact of the matter is that there are more people selling real estate right now. The pandemic has hit the message home for so many people. Comfort and reduced need for commuting, as well as economic factors, have resulted in the most surprising spike of home sales.