Covid-19: How the Pandemic Has Affected the Real Estate Market
Aug 16, 2022

The real estate market has been affected in a number of ways by the pandemic. In this article, we will discuss some of the changes that have taken place and how they may impact your business. First, let’s take a look at how Covid-19 has impacted home buying and selling.

The most obvious change that has taken place is the decrease in home sales. This is due to a number of factors, including the fact that many people have lost their jobs or are working from home and do not have the income to afford a new home. In addition, there has been an increase in foreclosures as people are unable to make their mortgage payments. This has led to a decrease in the number of homes on the market, as well as an increase in the number of short sales and foreclosures.

If at the beginning of the pandemic (2019) property prices were falling, today they show a recovery. Across the country, home prices are rising, rapidly.

According to the S&P CoreLogic Case-Shiller National Home Price NSA index, it indicates that in November 2020, house prices had increased by 9.5 percent from the previous November. At the end of 2019, the average house was worth around $245,000. It is now worth more than $266,000.

This is a huge increase, and there are a few factors behind it.

The price of a house is linked to the supply and demand for houses: if there are fewer houses available, potential buyers bid on the price to get one; if fewer people are looking for a home, the price will go down because buyers have fewer competitors. In a way, Covid-19 has affected both supply and demand.

Another effect is that due to falling mortgage rates, the cost of borrowing money to buy a home is going down. Mortgage rates have been falling steadily for a while, but they fell sharply in 2020, reaching an all-time low of 2.65 percent in January 2021.

There is no doubt that during the COVID-19 pandemic, the company’s habits changed to promote remote work, in the cases that it does or allows. And this also changed the interests of those who buy and rent houses, according to our real estate agents.

The changes affected our consumption habits and preferences and cover a wide spectrum, from how we educate ourselves or work to how we buy and play sports, for example.

Teleworking influences preferences for choosing a home

Of course, the real estate market was also influenced by the new labor dynamics. It has directly affected buyers’ preferences for property location as people can live further from their place of work if they have to commute fewer days a week.

On the other hand, it also influenced the size and distribution of the property. In many cases, they now demand larger homes since within the spaces one must be designated specifically for remote work.

To adapt to this reality, changes will also have to be made in urban planning, transport, and public services.

Another factor is that buyers are paying more and more attention to issues related to the sustainability of homes and their energy efficiency, a change that was already taking place but that may accelerate in the wake of the pandemic.

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