The tear of COVID has potentially irreversibly altered real estate markets. In just six months, COVID has completely changed what characteristics Americans believe are most essential for a living space.
Houses located near work offices and shopping centers, within densely populated neighborhoods that once dominated real estate search lists, are now finding themselves plummeting down in desirability. Instead, houses that are considered warmer, better educated, and less populated are now soaring in demand. George Ratiu, Senior Economist at realtor.com, attributes this shift in demand to COVID.
The introduction of remote work has made many businesses reconsider the importance of work offices. Many companies, including Google and Microsoft, have even enabled long-term remote work. As a result, Americans are favoring houses with comfortable home offices rather than houses located near their work office.
The convenience of online shopping has made many realize the insignificance of living in a house close to a shopping center. These once highly sought-after houses for the convenience of their location have, ironically, turned inconvenient. Consumers are turning more towards the comfort of online shopping, and thus houses located near shopping centers are plunging in demand.
Post-COVID caution also plays an important factor in the real estate market shift. Once the government decides to retract social distancing orders and life returns to normal, inevitably, many Americans will still be cautious of crowded places. Subsequently, houses in less populated neighborhoods will be, and are currently, more sought after than houses located in urban cities.
What is the result of the shift in the real estate markets? According to Forbes contributor Peter Lane Taylor, “not a single city in California or the Pacific Northwest ranked anywhere near the top of anyone’s ‘Best Of’ lists in terms of where Americans are moving.” Furthermore, popular cities such as Philadelphia, Chicago, and New York City were ranked near the bottom of the list.
With such drastic changes occurring in the real estate market, many experts suspect that the changes will turn fundamental. It should not be a surprise if America’s largest cities find themselves with empty houses and apartments.