What Does the Ongoing Pandemic Mean For the U.S. Real Estate Market?

The ongoing COVID-19 pandemic has resulted in huge blows for the U.S. economy. But it's become clear that the real estate market as a whole hasn't suffered in the same way. In fact, many markets are even hotter than before. But as the nation braces for a second (or, perhaps, a delayed first) wave, will the seller's market last? Around 43 million Americans move each year and, surprisingly, the coronavirus health crisis didn't necessarily stop them from finding new digs. Thanks to virtual tours and other technology, as well as increased safety precautions, those in the real estate game didn't experience too many setbacks during the pandemic. Even early on, the real estate sector didn't see losses that were experienced in other parts of the economy. Although millions of Americans lost their jobs as a result of COVID-19, the median U.S. listing price at the beginning of May actually increased by 1.4% from the previous year. That wasn't what many experts thought they'd see, as the 2008 financial crisis -- the closest event for comparison -- had majorly negative impacts on the housing market. And although housing demand did decrease at the beginning of the outbreak, the fact that supply also dropped (which likely took place when sellers got scared and pulled their homes off the market) may have actually kept the market from experiencing an endless freefall. As a result, Redfin reported that 41% of housing offers were subject to bidding wars in May, which hinted that demand was still higher than supply at that time. Despite the fact that 50% of homes listed in the DC Metro market don't sell the first time they are listed, keeping that supply-to-demand ratio intact may have allowed the housing market to maintain its hot status in many areas. In fact, many metropolitan areas are reporting that the market is hotter than ever. But will it stay that way as the pandemic drags on? Experts are cautiously predicting that it will, even though COVID cases are spiking all across the United States. Most people are no longer panicking about the virus (for better or for worse) and many people have adapted to necessary changes in how we normally conduct business. While we might have been slow to adapt the first time around, we're now accustomed to using technology or wearing masks to view available homes. And with testing more widely available and mortgage rates at their most favorable, it's likely that the housing market will continue to stabilize. That's good news if you're selling your home, but it may be frustrating for buyers. Although winter is typically a buyer's market, that might not hold true during the pandemic. If you need to move after a divorce, for example, and your relocation requires your children to travel for more than an hour between your and your ex's home, you may have to devote more time and a larger budget to ensure you get what you want. And what about when a vaccine finally becomes widely available? Things might change a bit. Many residents have deserted large cities, particularly those with higher infection rates and higher rates of rent; since unemployment rates continue to be high, it hasn't been an option for everyone to remain in these less affordable areas. Once a COVID-19 vaccine becomes available, experts predict we'll start to see people flocking back to these more densely populated areas, which could make housing more scarce and more expensive. But considering that working from home will still be very much the norm, the suburbs won't be abandoned. And while mortgage rates remain low, some suspect that trend will reverse when a vaccine comes onto the market. If the economy recovers, chances are that this will be reflected in mortgage rates. We may not know exactly what the future holds, both in terms of the pandemic and in terms of available real estate. But if you're planning to buy, sell, or stay put, it helps to know what might be in store as the pandemic continues -- if only for your own peace of mind.