It’s fair to say that the last 14 months or so have been unlike any other in recent memory. The COVID-19 pandemic has turned the world upside down, affecting people physically, emotionally, mentally, and financially. The pandemic has altered the way that people live and how they work, play, and interact with one another. Virtually all industries have seen the effects as well. Real estate is no exception. Now that things appear to be returning to a sense of normalcy, it’s fascinating to consider what buying new homes will look like going forward and when it’ll be time to start looking for the best home warranty with your next purchase.
Demand May Be High
Unemployment rates took a huge tumble during the early months of the pandemic. Slowly but surely, those numbers have risen. Many people struggled financially through this period, but the housing market (perhaps surprisingly) didn’t suffer. In fact, experts have noticed that homes are in demand and are selling quickly — above the previous year’s prices. This trend will likely continue. Affordability continues to be a challenge, but even the younger demographic, millennials, seems ready to buy their first homes.
People May Want Larger Homes
When constructing a new home, many buyers could start looking for more space. This is particularly true with living rooms, extra bedrooms, and home offices. The reason? In a post-COVID working environment, many employers could continue to allow or even encourage doing business from home. With that in mind, homeowners currently in smaller places may find it difficult to comfortably work from. Switching to a new place with larger workspaces could be appealing.
People May Want to Move Away From Larger Cities
There has long been an appeal to many people to live in urban areas. It’s easy to see why. In a bigger city, there’s always plenty of places to shop and dine. Nightlife options can be exciting too. But in a recovering COVID world, people are warier of this kind of lifestyle. Instead of being close to shopping, folks can stay at home and order online. Instead of dealing with huge crowds on public transit or walking busy streets downtown, people are drawn to open areas. New construction could see a boom in places with a lower population density.
Younger People Will Build
Before COVID-19, the trend was for young adults to leave the homes they grew up in, rent a studio apartment, and not think much about buying a home for a while. Younger people seemed to enjoy being close to a faster-paced environment and exciting lifestyle. COVID-19 could very well change that. Instead, the pandemic is causing millennials and other young people to rethink this strategy. This demographic wants to move to the suburbs, be close to good schools, have land to build on, and be near outdoor attractions.
Prices Are Still Going Up
Demand for new homes remains high, so home prices are still increasing. It is especially true at the low end of the market because the supply is lower. The cost of building materials such as lumber increased during the pandemic, being one reason for the uptick in prices. However, people also see that home equity is appealing. If a person buys a new home today, the value could be attractively higher in the short months and years ahead.
The impact of COVID-19 has been widespread on all walks of life. The housing market didn’t suffer as much as many industries, causing potential buyers and analysts to wonder what lies ahead for newly constructed homes. If you are thinking of building a house as COVID-19 cools off, there could be some positive and negative aspects to this decision.