Is COVID Officially over? Is it safe to come out now?
I think so… at least here in Seattle, WA… but as a concerned citizen, you may be wondering what is going to happen to the real estate market now? Will there be a shift?
As a Seattle, WA real estate broker, I am sharing my TOP 5 PREDICTIONS for what will happen to the real estate market in the wake of COVID.
1) COVID promoted a reduction of interest in living in cities, especially condos in the downtown core. While urban condo markets softened, suburban and rural properties experienced a surge in growth. With many people now living outside “comfortable commuting distance from downtown, I expect to see a shift to more remote and hybrid work schedules. As employees are encouraged to return to work, we should see more interest and activity in previously out of favor condos near work centers.
In addition, condos and apartments with shared amenities – such as clubhouses, workout rooms, theaters, kitchens, etc. should be allowing these facilities to be open and used freely by residents.
2) COVID or not, we still have a huge demographic surge right now – in the millennial population is now transitioning away from the “single life” and living in rentals, living nomadically, and living in smaller condos. Much of our buyer demand is being brought about not just by COVID-induced low interest rates, which we now see fading, but by the desire to start a family and have a home of their own. This buyer demand should remain strong as it is driven by lifestyle factors, and not by market factors.
3) COVID pushed us through a “grand experiment” in remote work. Many companies found that they did not need to have employees in the office in order to be productive. Some, especially in the tech and sales sectors – have opted to switch to a fully remote workforce, or are allowing employees to return to work on a hybrid model – with some work being done at home, with the occasional need to come into the office for meetings. This should soften the office space sector. Retail locations continue to be soft as well. Some businesses, such as restaurants, conference locations, and hotel/vacation buildings will start to see a recovery.
4) In the face of high inflation, many people want to stay in the properties they have, resulting in reduced inventory. Buyer demand still outstrips seller demand, with many markets across the country having less than 1 month’s inventory. As long as inventory remains low, we can expect to see housing prices continue to rise.
5) In blue states like Washington, we saw many people fleeing the region (we called them “bailers” because they were “bailing out”) to freer red states like Idaho, Texas, and Tennessee. With the re-opening of businesses and cessation of most COVID restrictions this politically motivated relocation should lessen.
We have a lot to be thankful for as we end the long season of COVID, and the boom real estate market that accompanied it. There are many other market forces at play now, and it will be interesting to see what happens next. Keep an eye on INFLATION, MILLENNIALS, INTEREST RATES and INVENTORY. Remember – as long as inventory is low, prices will continue to rise.
WHAT DO YOU THINK?
Am I right? Am I wrong? What have you observed? I would love to see your take in the comments below!