Let’s talk about the housing market and analyze how the pandemic may affect future investment opportunities. To go deeper into this topic, we’ve featured 30 property investment experts to share their predictions about the state of the post-covid housing market.
With each property sourcer or property investment expert’s quotes, you’ll hopefully gain more insight into what to expect after this pandemic subsides. No one really knows what’s going to happen, but the people on the ground have a lot of knowledge they can share with us about what to expect.
Countryside Property Prices will Increase
Deepak Shukla, the Founder of Pearl Lemon Properties, states,
“There’s going to be a lot of movement in the residential real estate market because a lot of people have been waiting to make investment decisions after the pandemic ends. This is primarily because of restrictions that limit surveyors who want to access properties and potential new tenants who want to visit homes. For this reason, prices have risen in places that have gardens and patios. Generally, properties in the countryside have much higher prices now, while properties located in big cities have stagnated in growth. So in the post-Covid housing market, it’s likely that spacious properties with outdoor space will be more expensive than those in the cities.”
Remote Work Encourages People to Buy Nicer Homes
Madeline Mishkind from RE/MAX Properties of the Summit states,
“The mountains of Colorado are seeing a surge of buyers from not only the front range but a record number of out of state buyers either moving to the mountains or purchasing a second home. People are still being given the luxury of working from home and desire the quality of life that they prefer, which is being able to go skiing in between meetings or hiking or biking during their lunch breaks. We are also seeing people realizing that life is too short so they are accelerating their plans of having a ski home in Breckenridge, Keystone or Copper Mountain or a place on the lake in Dillon or Frisco. I don’t see this market slowing down for at least a year or two at the earliest. It is all about the lifestyle and living life to the fullest.”
Dubai’s Rental Market Might Recover
Samson Watts, the Founder of Property Scout, states,
“COVID-19 caused a significant disruption in the Dubai real estate market in 2020. The Dubai rental market has experienced a major shock and has had to adapt during a very difficult period. The planned Dubai Expo starting in October will provide an opportunity to showcase its real estate market in a post-COVID-19 world to both visitors and residents. Hopefully, a rebound will occur in the Dubai hotel and short-term rental market. As a leading Proptech company, Property Scout is at the forefront of enhancing technology to improve the property experience for buyers and renters in Dubai. With restrictions on mobility, virtual viewings have been introduced to enable buyers to view homes online before going in person.”
If Boomers Sell, We’ll Have Supply Spike
Luke Smith, the Founder of We Buy Property in Kentucky, states,
“Construction builders haven’t caught up since the 2009 crash. There are still supply chain constraints caused by COVID-19 that have caused an increase in the pricing of materials. This is resulting in higher costs to build homes. However, with the shortage of supply, many are forced to build a new home rather than to buy an existing one. Boomers are the only generation that could slow or normalize the supply and demand. As Millenials mature, Boomers are retiring. If Boomers decide to sell their properties, we could see a wave of houses hit the market in the coming years that could help normalize supply with demand.”
The Housing Market Will be More Competitive
Angie Watts, from Clearsurance states,
“The housing market is booming as we re-emerge from the Covid-19 pandemic. With limited inventory, this is proving to be an incredible opportunity for those considering selling their home. It’s not uncommon to sell above list price, with multiple offers to choose from. In some cases, buyers are offering to pay the seller’s listing fees as well as waiving contingencies such as inspections and appraisals to be more competitive. Unfortunately, due to material shortages and delays, new construction has been hugely impacted. Build times have increased, and some builders are being forced to release home lots in small batches each month, further limiting inventory and driving costs up. Some are limiting the ability to customize and have long waitlists of potential buyers. As a buyer, it can be a stressful time to purchase a home. The market is more competitive than ever.”
The Housing Market is Cooling Down
Brandin Johnson, the Founder of We Buy Houses Fast in Orlando states,
“As we re-emerge from the covid-19 pandemic, the state of the housing market might start looking very different from what it was during the pandemic. For example, during the pandemic we saw that the market was red hot, with multiple offers on every property, buyers offering sometimes $50,000 above list price, bidding wars, waiving appraisal contingencies, houses going pending on the first day on the market, etc. Now, as we recover and emerge from the pandemic, we are already seeing the market cool down in certain areas, with buyers not willing to offer large sums of money over the asking price, and with houses staying on the market a little bit longer. This provides opportunities for buyers to be able to actually purchase a home and not end up being priced out by others who are offering way above the asking price… Sellers will also feel more confident in selling their homes now that we are emerging from the pandemic, so we will also see an increase in listings on the market which will also cool down some of the competition between buyers.”
Remote Work Will Cause Buyers to Get Larger Homes
Ryan Waller, from Guelph Real Estate Agents states,
“It’s estimated that 4 out of 5 employees will want to continue some variation of working from home in the future! This will impact the way we use our homes in the future: Homes that offer a space for a home office will be crucial. In suburban markets, where employers require their staff to work 1-2 days at home and commute into the City the other 3 days, employees will need space to shut a door and concentrate on their work. Outdoor space is also realizing a surge in interest as employees will enjoy lunch and breaks outside the house- pools, hot tubs, a deck, ability to place outdoor furniture are all key considerations for home buyers in today’s market.”
There Could Be a Stabilization Period in the Housing Market
Ali Choucri from Engel & Völkers East Group states,
“We have opposing forces affecting the housing market. On one hand, we have inflation, high demand for housing across the board, and low-interest rates pushing prices higher. Investors are looking for yields, which are becoming thinner as cap rates compress. On the other hand, we have a wave of foreclosures and evictions that still have not come to market due to the Covid moratorium. As these forces balance out, we’ll likely see a stabilization period where appreciation slows down. I think the upper and lower segments of the market will continue to perform well – namely luxury and workforce housing.”
The Post-Covid Season is the Best Time to be a Seller
Michele Harrington from First Team Real Estate states,
“As we re-emerge from the Covid-19 pandemic, the real estate market is simply thriving. Thanks to limited inventory, homeowners have amazing opportunities to cash out big on their home equity in order to afford a new home – especially with extremely low mortgage rates remaining. The Fed isn’t expected to raise rates until 2023, which means securing a new mortgage right now is more affordable than ever. In terms of timing the market, this is the perfect time to be a seller. Homebuyers also have a good opportunity to secure a low mortgage rate, but they will be coming up against challenges because of the limited inventory.”
The Pandemic Made People Rethink Their Housing Situations
Amber Dolle from KW VIP Properties states,
“In this past year, the housing market has been on fire and continues to get hotter as time has moved on. Covid really got people thinking about their living situation and ignited people into getting homes that better suited their wants and needs. It also opened up a new possibility for many people who were able to work from home so people had new opportunities to really move to where they wanted to live when before, they were tied to the proximity of their offices. With so many people making moves in the past year, I would assume we will have a lot fewer people wanting to sell coming up in the next couple of years once this Pandemic-motivated-moving slows down. So if we have more home buyers coming to the market and fewer people wanting to sell and move, we may actually see this seller’s market continue for years to come.”
Programs are Developing to Support Refinancing & Saving
Michele Paiva from The Finance Therapist states,
“While some worry about housing post-pandemic, I see this as an avenue for some to go from struggling to investors. The price of lumber will begin to drop as factories reopen full-throttle and opportunities will expand for purchasing and investing. There are mortgages in place and programs in place, like hospital forgiveness programs and HIRO, so that refinancing and saving can be attainable for even those fiscally underwater. I enjoy seeing those take lemons and make lemonade, and if anything, COVID-19 has taught us that we must remain industrious and savvy to beat it medically, emotionally and, fiscally.”
Landlord and Tenant Interactions will Dramatically Change
Ryan David, from We Buy Houses in Pennsylvania states,
“I think the new industry standard post-COVID you’ll see landlord mask mandates when visiting tenants inside their apartments. The potential challenges will likely be to the landlord interview process, more specifically when taking multiple applicant appointments at the same time. It will make the scheduling process more difficult for landlords and applicants.”
The Housing Supply & Demand Gap will Close
Burke Files, from Unicus Research states,
“Numbers from the Mortgage Bankers Association show 2.1 million homes in foreclosure forbearance programs, and 1.5 million homes in payment arrears or work out programs. According to Freddie Mac, there is a shortage of 3.8 million single-family homes in the US. Supply has lagged demand since before COVID. The COVID Shock economy has only accelerated the migration trends and exacerbated the gap between supply and demand. Between June 30 and September 30, 2.1 million homes will exit forbearance, half of the 1.5 million homes in arrears will be sold, and 400,000 new homes will come up for sale. Thus, 3.25 million homes will enter the market in the next four months, closing the gap between housing supply and demand. Supply and demand will not be unformed but chunky, prices will remain under pressure in migration origin states and more robust in destination states.”
Housing Demand will Rise as Prices Skyrocket
Rick Abbiati, from Colony Property Investments states,
“As we are emerging from the pandemic, you are going to see tremendous pent up demand for houses. This demand has been artificially hindered as a result of lockdowns and general market apprehension. This will cause housing prices to skyrocket.”
Coastal Real Estate will be Strong in 2022
Phil Immel, from Real Estate Guru states,
“The current post-covid market is inventory constrained and seller driven. Investors have been getting pushed out of the market with low-interest rates and buyers will continue to purchase homes in less than perfect condition. Low foreclosure inventory and few active listings have made for a competitive market for well-priced properties. Due to work from home policies and a desire to have more space has moved buyers to coastal and areas where open space and recreational amenities are abundant this includes 2nd home and suburban markets. This continued demand for coastal real estate will be strong through 2022 as pricing has increased 18% year-over-year and interest rates continue to be low for consumers. Even though a majority of our buyers present cash offers in order to win the competitive bidding environment.”
Mortgage Rates May Increase
Simon Ru, from UpNest Real Estate states,
“As we emerge from the COVID-19 pandemic, prices will continue to rise, though not as sharply. Inventory will finally increase as people finally feel comfortable moving. This will somewhat reduce the bidding wars that have been a constant of COVID home sales. As we enter 2022 and beyond, the Fed will raise rates on the 10-year T Note, which in turn will raise mortgage rates. Though mortgages will still be affordable, this will somewhat suppress buying. We should move from a heavy seller’s market right now to a slightly more balanced market, though one that still favors sellers.”
Apartment Renters May Increase
Lily Burns, from Aptamigo states,
“As workers continue to return to the office, many people will begin to move back into the city. As a result, the housing market will likely see an increase in apartment renters in major cities.”
Interest Rates May Increase by 0.5%
Mark Motes, from Mark Buys Houses states,
“The post-Covid housing market is expected to look very similar to the Covid housing market. Interest rates are unlikely to increase by more than 0.5% over the next 18 months. With inventory increasing slightly, it also seems that prices will not be likely to decrease, but might have a slower increase or stay flat. One trend very likely will continue: bids on properties unseen. More people will continue to buy houses without seeing the property in person. For investors, foreclosures will be likely to occur in dramatic effect over the next several months. This will provide some great opportunity to purchase investment properties at a discount.”
The Suburbs will Become More Lucrative
Mitchell David from Beachlife & Oceancity Realtor states,
“A new focus on health and safety may result in an exodus to the suburbs. Social distancing may make people realise just how little space they have. Living in a city is certainly convenient, albeit cramped. More people than ever, especially families, are beginning to realise they would rather commute and live in a clean, fresh space away from a city. Urban life is rapidly losing popularity. This means that properties in the suburbs are becoming more popular, and therefore more lucrative. The average family may well have two parents working from home, and the children separately video calling their schools. So, a larger home may well be needed. Poor internet signal, insufficient space, or even loud neighbors can make working from home nearly impossible. Since it’s likely that remote working will become the new norm, a home workspace is more necessary than ever.”
Empty Retail Stores will Become the Norm
Rick Andrews, from Rick Andrews Real Estate states,
“The pandemic has greatly heightened our awareness of touchpoints and social distancing. Especially in hotels, restaurants, retail stores, and offices, safety is now paramount. You’ll need more than a few “stand here” floor stickers to satisfy a buyer’s worries. Contact tracing apps, sensors, and touchless services are becoming the norm. It also changed our shopping habits. One by one, large department stores are going under. Even before the pandemic, the general opinion was overwhelmingly leaning towards online shopping. The pandemic and its restrictions have tipped the scales once and for all. What does this mean for real estate? Simply put, there are going to be a lot of empty stores around. This means a lower retail presence and plenty of empty lots where a store once operated.”
Property Investors Should Expect a New Normal
Bradley Bonnen, from iFlooded Restoration states,
“I believe house prices will fall rather than rise and they will not rise at such astronomically high rates. This is a significant occurrence that should not be overlooked. While it could simply be a pandemic-period exaggeration that fades as COVID vaccinations become more widely available, it could also represent a new normal for housing and housing finance dynamics. As a result, anyone involved in the housing industry should have an opinion on the subject, as house price appreciation is crucial to the economics of how families accumulate wealth, how much risk there is in mortgage lending, what the best business strategy for mortgage and home construction companies is, and how government policy is made.”
As Lockdowns Lift, Customer Demand Rises
Jonathan Kaloara, from We Buy Properties in the Bay Area states,
“There’s no denying that the COVID-19 pandemic has impacted the real estate market negatively and if we were to look at the financial condition of the sector, real estate assets have fallen by 25%, especially in the leisure and hospitality sector. But the demand is already growing as lockdown restrictions are being uplifted. Since most people are opting for working from home, this will definitely have a positive impact on the real estate sector as sales are likely to increase. Customer demand is slowly shifting towards more efficient properties and residential properties will be in demand due to remote working. It is necessary for real estate agents to embrace sustainable and digital methods of conducting business as pandemics would be a likely occurrence in the future too.”
The Unpredictability Will Stay for the Foreseeable Future
Rogers Healy, from Rogers Healy & Associates Real Estate, states,
“The housing market will only continue to heat up. This is a historically unprecedented market, and it’s here to stay for the foreseeable future. With an increasing amount of people putting in cash offers, paying well over asking prices, and buying sights unseen, there is no end in sight to this sizzling market. Unfortunately, due to the pandemic, the prices of building materials have increased as production dwindled. Supply isn’t there to meet demand, consequently. This could lock many buyers out of the market for the time being until supply increases. However, the luxury sector of the market just keeps thriving, especially in areas where there is an influx of people relocating from areas like California and New York.”
Buyers Face Significant Hurdles
Nikhaar Shah, from Home LLC, states,
“US housing prices have risen during the Covid-19 pandemic on the back of strong millennial demand, low supply of inventory, and historically low mortgage rates. We expect home prices in the US to grow post-Covid, both in the short- and long-term.
This is because:
- The US is lagging most other advanced economies in home price appreciation.
- Housing inventory is at an all-time low. Low supply equals rising prices.
- Millennial homeownership is set to increase in the next 2 decades. This will lead to sustained demand for homes in the long term.
- Banks are following very stringent underwriting practices. The chances of future housing oversupply because of defaults and foreclosures is minimal.
- Affordability is increasing on the back of rising incomes and low-interest rates. This will further strengthen demand.
Buyers face significant hurdles in the form of a 20% down payment requirement. This is especially the case for younger millennials and minorities, who do not have access to generational wealth.”
Real Estate Devaluation
Bryan Stoddard, from Homewares Insider states,
“Without a more detailed analysis of the market, but speaking from personal experience, it is clear that other changes have taken place as well. The devaluation of some real estate. The price of larger and more valuable real estate will fall more slowly compared to properties that have little to offer. Even so, it seems that prices have soared, but customers are more cautious and the criteria have changed. I feel that the rise of prices has slowed in many important real estate markets recently and that it will turn towards a negative trend soon. In other words, no major increase in property values is expected in the near future, so it is a better idea, if you have capital, to buy than to sell in this situation.”
The Financial Perspective of the Housing Market
Ethan Taub, from Billry states,
“The Post-Covid housing market is one of the most exciting things to follow as a finance expert, so here’s my take. With Covid-19 leading to a demand for homes with more indoor and outdoor space, prices of rural homes have rocketed, leaving the previously sought-after urban apartments to flop. Restrictions led to housing construction output reducing by nearly 15% in 2020—the outcome? A housing shortage. As restrictions ease alongside the vaccine roll-out, demand is overtaking supply, and the market is on fire as a result. Restrictions in places such as the UK led to the closure of the housing market for 15% of 2020, contributing to the decline in sales. However, where areas had previously struggled to recover from the previous housing crisis, Zillow revealed the housing boom triggered by the pandemic has resulted in a 9% increase in house prices across the US. The upside? Economic recovery for previously disadvantaged communities. The Downside? First-time buyers will struggle more than ever to get their foot on the ladder.”
Supply Will Shortly Outgrow Demand
Alex Magnin states,
“Having managed my company’s finances since day one, I’m a large follower of market trends, and it’s hard not to be fascinated by the dramatic change in the housing market recently. Both the new work trends of hybrid and remote working have offered new flexibility for workers. With workers no longer factoring in lengthy commute times, the demand for rural homes is incredible. The demand has led to a 44% reduction in rural home stock and a staggering 16% increase in prices, all as a result of Covid-19. If demand for in-office positions in urban locations continues to wane, the rental sector could suffer huge losses. As the highest stock of rental properties is situated in inner-city locations, for example, 71% of the population of the city of New Haven, Connecticut are renters. However, this statistic is certain to drop as supply will shortly outgrow demand. But it’s not all negative, besides we gave our dog their dream yard, remember? The change in housing trends will allow rural communities to flourish and improve the population’s mental health as we sacrifice our perfect sesame seed bagel for inner peace.”
Evictions Could Influence Landlords to Sell
Doug Hentges from DH Home Solutions states,
“The housing market since covid has been a tricky one. Inventory has been very low so it can be harder all around in terms of acquisitions. I feel things are slowly starting to turn and inventory makes its way back a little by little. With the evictions being released soon, that could also cause lots of landlords that no longer want to keep their properties to sell.”
If you made it to the end of this article, then I hope you’ve gotten a lot of value from the insights these property experts have shared. Be sure to check out the Pearl Lemon Properties blog for more articles like these that help you understand the international housing market to influence your investment decisions.
