COVID 19 IMPACT ON THE U.S. RESIDENTIAL REAL ESTATE MARKET IN 2020

 The COVID-19 pandemic significantly impacted the U.S. residential real estate market in 2020 but not in the way everyone expected.

In April and May, while buyers and sellers were unsure of what was going to happen due to the Covid-19 virus, the real estate market slowed. Both buyers and sellers were worried about being exposed to the virus and lenders were hesitant to lend as employer layoffs soared.  

But by July the real estate market had improved dramatically across most states.  

What helped create this change?   To name a few...

-       * Increased buyer interest - Extended COVID-19 restrictions such as “shelter in place               orders” put in place by government entities, employers work from home policies and school     closures forced families to share limited space at home. Since there was no longer a need       to be close to the office and / or their current living space was not conducive to working           from home or for their children to learn online it was a perfect opportunity to make a move       to a more desirable area or to a larger home.

-       * Government Stimulus Package - The Federal Reserve stepped in with a broad array of         actions to limit the economic damage from the pandemic, including up to $2.3 trillion in             lending to support households, employers, financial markets, and state and local                       governments. 

   * Mortgage interest rates at an all time low - By July, the 30-year fixed rate mortgage fell           below 3% for the first time!  Record-low mortgage rates caught the attention of                         potential home buyers. Households that hadn’t lost income during the pandemic were               saving money on commuting, entertainment and vacations found themselves with                     more money to invest in real estate.

   * Real estate industry increased use of Technology - Virtual showings became the norm. At     a time when in-person showings were inadvisable or prohibited, alternative marketing               opportunities such as livestreaming or online virtual tours were made easily                               available for buyers to view the home. In addition, lenders, appraisers, inspectors, escrow       and title companies had to change to meet pandemic imposed restrictions.

In this series we will continue to explore what the experts are saying about the U.S. residential real estate market in 2021 and how this may influence changes to your relocation policies surrounding real estate.