Following the coronavirus pandemic and the numerous measures to curb its spread, the economy has been on lockdown. It has affected several sectors of the economy, and the housing market has also felt the impact. People are finding it difficult to buy and sell properties, and there is uncertainty in the industry. That is because no one can predict how long the pandemic will last and how long the economy will continue to be down.
For this reason, many investors want to know the future of real estate after the pandemic so that they can prepare better. Since humans are naturally social, experts predict that they will be an upsurge in the number of people visiting retail stores, restaurants, bars, and hotels after the lockdown. However, the future of real estate investment is not as easy to predict as other industries, but experts have some predictions and forecasts for investors.
Below is what we expect from real estate after the pandemic.
1. Increase in the use of digital technology by real estate agents
During the pandemic, real estate was among the essential businesses, and they had permission to operate in several states such as Illinois, New Jersey, California, Washington, etc. Although states like Vermont and Pennsylvania did not permit the activities of real estate as an essential business. Thus, real estate agents had to adapt to innovations that will bring them closer to their clients without physical contact.
In the future, we expect more integration of digital technology in real estate so that the industry can stay relevant. Starting a company in the industry and integrating technology from the start will be a huge advantage. Several agents will move over from the “old school” method to virtual technology and digital methods. Client’s will no longer need to be in the area before they can see the listings. Rather, agents will be showing them the listings using virtual open houses.
2. Increase in distressed properties
The values of some real estate properties are declining because of the coronavirus pandemic, and investors are targeting distressed properties. Rental homes, mortgage-backed securities, and hotels are top among the distressed properties on the rise. Already, investors are taking advantage of the distressed properties and the falling prices of houses in 2020.
The decrease in prices will continue for a little while, but few economists predict that there will be a recovery in the housing market after the pandemic. These investors foresee a U-shaped recovery, just like that of the 2008 housing crisis. But a lot of experts predict that the US housing market will not experience a U-shaped recovery. Instead, the recovery will be V-shaped as in South Korea and China.
Since the pandemic has caused prices of properties to fall, this is an opportunity for investors. We advise that you should buy a property now if you have a good deal. If you do this, expect an excellent return on your investment after the pandemic.
3. Buyer’s or Seller’s market?
Before the COVID-19 pandemic, there was a high demand for houses because of strong employment and favorable demographics. The demand for homes caused prices to increase, and it was encouraging to the sellers. During the pandemic, the economy was on lockdown, the number of sellers became higher, and the prices of houses declined. This was favorable to buyers.
However, some experts believe that this will change, and the market will no longer favor the buyers. But other experts argue against this because they think that it is too early to make predictions. We foresee an increase in the demand for houses and the US housing market’s recovery after the coronavirus pandemic. That is because of the build-up demand when people could not purchase properties during the COVID-19 pandemic.
Now sellers are very accommodating, and they don’t want to scare off their clients. So if you’re going to buy a property, the best time is now.
4. Short-term rental market
Following the pandemic and lockdown, the short-term rental market has felt the highest impact. With the halt in tourism and vacations, there has been a decline in Airbnb rentals to an all-time low. But with the sharp recovery of Airbnb China, there is hope for short-term rentals in the US.
A recovery in the US economy and the easing of the lockdown will also bring about a sharp recovery in the US Airbnb. About 99% of hosts are waiting to get back into the short-term rental market after the pandemic.
We recommend that you comply with the guidelines and continue your short-term rentals for medical staff on self-isolation, students in need of housing, and remote workers. We also recommend that you convert your short-term rental properties into long-term rentals for now and switch back to Airbnb after the pandemic. If you do this, you will not lose your rental income.
The future of the US housing market is promising after the pandemic. You should buy properties from the analysis if you have a good deal and expect an excellent ROI after the pandemic. Contact us today for more information on the housing market and succeed as a rental property investor.
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