July 28, 2020
Real Estate Trends: The Long-Term Effects of the Pandemic on Local Real Estate
Trends come and go in the real estate world, but the unexpected events of 2020 have left many wondering where the industry will go from here. It goes without saying that the pandemic will have some long-term impacts on real estate and the way we do business. But just what will those effects be?
While nobody can predict the future, our status as a local market leader gives us some pretty good insights into what’s hot and what’s not in the area. We’ve combined the local trends our agents have been seeing with the predictions of national experts to give you an idea of what the future of real estate could look like and what trends may be here to stay. Spoiler: it’s not all doom and gloom!
Earlier this year, millions of people said goodbye to commuting and hello to telecommuting as the world transitioned to remote work. Home and office suddenly became one. Even as the world reopens, many businesses – by choice or by necessity – have continued remote work in some form. And after the pandemic has passed, working from home is predicted to stick in many industries, with ⅔ of organizations stating they plan to keep the work-from-home policies they implemented during COVID-19.
What does all this mean for real estate? Before the pandemic, location was often top priority. Things like ‘close to downtown’ or ‘convenient access to the interstate for a short commute’ were selling points or high on buyers’ wishlists. And while these factors won’t go away entirely, location could play less of a role in people’s home search as jobs become less tied to physical location. After all, if there’s no reason to go into the office five days a week, living near where you work is less of a necessity.
Ultimately, this means places like further-removed subdivisions, the outskirts of town, and small communities off the beaten path could see a boost. Home prices are often more affordable in these areas than in the heart of town, meaning you can get more house for your money without the added disadvantage of a long commute. That’s where our listings in communities all across the Corridor can come in handy!
Urban Insider Takeaway: As trends shift toward remote work, home doesn’t have to be near work, and many people are thinking about buying their dream home in small towns or in the country.
From Renter to Homeowner
Feeling cramped in your current rental? You’re not alone. Cooped up at home, many renters began realizing they could use a bit more space. And with interest rates at record lows, more and more renters are seizing the opportunity to become homeowners, swapping out their rent check for a mortgage payment.
What kinds of homes are these new homeowners flocking to? Urban Acres agent Mitch Price says he’s seen increased interest in renters wanting to move to a condo or a townhome – a little more room, without all the space and maintenance of a stand-alone home.
And the numbers are here to back it up! According to the Iowa City Area Association of REALTORS® (ICAAR)’s monthly sold reports, active condo listings were up in May and June of 2020 compared to May and June of 2019. The Iowa Association of REALTORS® also reports that in April 2020 (the most recent data), condo sales are up by almost 21% in the Iowa City area compared to last year.
What does all this mean? More condos and townhomes are hitting the market, and the increased demand means they’re not staying on the market for long! Luckily, we’ve got dozens of active condo and townhome listings across the Corridor.
Urban Insider Takeaway: Lower interest rates mean more renters are taking the leap into homeownership and are often opting for condos and townhomes.
The New Hot Commodity: Home Offices
Bad lighting. Subpar backdrops. Glitchy WiFi. Dogs barking in the background as UPS drops off your Amazon package. These are the hallmarks of Zoom meetings in the age of telework – and they’re often less than ideal.
If you don’t already have an office space in your home, chances are you feel these pain points a little more. (Anyone who’s ever had to take a work meeting at the dining room table or any other common space in the house can probably attest to this). That’s why ‘home office’ will likely become a common item on buyers’ must-have list, and a key selling point for sellers. Of course, many homes don’t come with a built-in office space; usually an extra bedroom that could be converted to an office will work just fine.
Home offices do more than offer peace and quiet for work meetings. Having a room dedicated to work helps keep home life and work life more separated at a time when they blend together all too easily. (I have time to throw in a load of laundry quick before this Zoom meeting, right?).
Some experts even predict that this trend could snowball, spelling the death of the now-mainstream open floor plan and a return to more traditional, segmented rooms that have specific uses. Despite the unknowns, it appears clear that interest in home offices will continue to increase as working from home becomes the norm.
Urban Insider Takeaway: The shift toward remote work could mean more buyers searching for a home with dedicated office space or an extra room that could be converted to an office.
A Little Technology Goes a Long Way
While nothing can replace walking through a home with an expert Urban agent by your side, technology has made itself a regular part of the home buying or selling process. From using video and 3D tours to browse a home to signing paperwork electronically, our company was built with technology in mind from the beginning. These options have offered safety during the pandemic and will continue to offer convenience for years to come.
Urban Insider Takeaway: Combined with the expertise of an agent, technology is making the home buying and selling process smoother and more convenient.
Final Takeaway: The Market is Active
Real estate and Urban Acres will continue to work to adjust and evolve to this new reality (because we know you don’t want to hear the phrase ‘new normal’ yet again). What we’re all pleased to see is that the local market is still very active. Have more questions? Ready to buy or sell? Let us help – we’ve got more than 50 agents ready to lend a hand.