The COVID-19 has affected the residential real estate market adversely. Orders to stay at home and concerns of getting infected reigned supreme in almost all sectors, one reason that every segment of the economy suffered setbacks and is still reeling under the spell and striving hard to regain a foothold again. Another cause of concern is that not everyone is allowing strangers to enter their premises due to the infectious disease.
However, with the rollout of vaccines and people getting vaccinated in thousands, if not more, the real estate market is expected to look up once again.
Benjamin Gordon Cambridge Capital explains the situation further
The subprime mortgage crisis that rocked the world way back in 2007 through 2009 still lingers in the minds of people. Since making mortgage payments was one cause of concern and when many homeowners could not shell out the payments, they had to lose the collateral with which they had dreamed of making their dream homes.
If not the same situation, many people have lost their jobs due to COVID-19. There were job losses and pay cuts. So, if you know you have a job that you might lose any day now, you certainly cannot take the risk of availing a mortgage to buy a new home.
Despite such uncertainties, many listings showed people were still interested in investing in new property, perhaps only a fraction of what it might have been in the absence of COVID-19.
What happened that created ripples cites
As mentioned above, despite the uncertainties, real estate did look up at least to the pre-covid times even if it was for a brief period. It was observed that housing supply recovery was not at the same pace. Inventory declined and as of August 2020, less than 2/3rds the number of homes were on the market.
Aside from health concerns, not being sure of paying the mortgage payments was another cause of concern that deterred people from investing in a new property or a second home.
However, there is good news, because according to the Michigan Survey of Consumers, the buying conditions for homes have seen an improvement and are almost back to what it was a year ago.
There has been contrasting reasoning about reasons of buying property during the pandemic. While a year earlier, people cited investing in real estate as a good investment and due to prosperity, after the pandemic, people have cited lower rates of interest as the primary reason for buying property and investing in real estate.
In a nutshell, the ongoing COVID-19 pandemic has affected adversely the housing market and even more during the months of spring last year as cited by Benjamin Gordon Cambridge Capital. Metros have witnessed a decline in real estate investment. While the confidence among consumers has still not returned fully, it will be some time from now before things get back to normal to the pre-covid times.
While few sects believe that this is the best time to buy property, others’ purchasing power does not permit them to take the plunge.