The COVID-19 pandemic has had unimaginable repercussions on the worldwide economy. As a result, many homebuyers have had to be even more careful about their investments. The pandemic has affected not just unemployment rates and job security, but also where people want to live and what kind of properties they want to invest in it. For instance, the closure of many establishments and the need to comply with social distancing protocols has left many city dwellers longing for a life in the suburbs. If you’re one of these people, you’ll need to act fast because prices are set to hike when there’s high demand. So is real estate still a good investment during these trying times? Here are some key factors to review.
Millennials and their market-driving decisions
Before the pandemic – say, in 2019 – millennials were killing off the starter home market. Now at the prime age to buy their first homes, they aren’t as financially stable as their parents were at their age. Born from 1981 to 1996, millennials have a clear memory of growing up during the 2008 global recession. Many of them are also bathed in student debt and will be paying off their loans long after they’ve graduated. Because of this lack of financial stability, they’re wisely choosing to put off marriage and starting a family. All these factors and decisions lead to them putting off buying their first house. Instead, they’re renting for longer or staying with their parents.
But the pandemic is changing this. New surveys suggest that 28% of millennials who don’t own a home are now looking to buy one because of the pandemic. So what kind of homes are they looking for?
Evacuating to the suburbs
The pandemic is stripping big cities of their appeal. Since the shutdown of establishments to comply with health and safety protocols, millennials who moved to big cities before the pandemic no longer have as many reasons to stay there. This has been an emerging trend for the last few years, but the pandemic has accelerated it. Eager to comply with social distancing protocols, people crave more wide-open spaces and less congestion.
The good news is that this new trend of moving to rural areas is pushing city condos to lower prices. If you’ve ever wanted to buy a condo for sale in a business district, now is your chance.
As it’s very likely that travel restrictions will stay in place for some time, homeowners are looking to invest in a home away from home. These will act as their second home. Many of these will be located in or near the countryside or coastal areas. If many other buyers have this same idea, prices are going to hike. So if you have the resources to invest in a vacation property, strike while the iron’s hot.
Larger lots for multi-purpose, multigenerational properties
Buyers are looking for larger properties that can serve many different purposes. As people continue to live their lives from home, they’re going to want to invest in homes that have spaces for them to work, study, and relax. Because of social distancing protocols, homeowners will also want to live with more of their family members to spend more time with them.
Real estate is still a good investment, but you have to know where to look, and you have to act fast. The most in-demand kinds of homes in this climate are those that can act both as refuge spots away from big cities but can still function as places for families to work and attend their classes virtually. It’s important to observe the purchasing behaviors of millennials because they are the most populous generation in the workforce.