Real Estate Trends Have Changed Due to COVID
The coronavirus pandemic changed many things, buying and selling trends among them. The National Association of REALTORS® (NAR) recently released its annual Profile of Home Buyers and Sellers report, which found that the pandemic incentivized buyers to search out multi-generational homes, while pushing sellers to sell their properties faster.
According to the report, buyers who purchased after March were more likely to seek out multi-generational homes. These purchases accounted for 15 percent of sales after March, compared to 11 percent for those who closed before April. This may have to do with quarantining periods, during which consumers stayed home, individuals moved back in with their parents, and some worked remotely, causing people to rethink their living spaces.
“The coronavirus, without a doubt, led homebuyers to reassess their housing situations and even reconsider home sizes and destinations,” said Jessica Lautz, vice president of Demographics and Behavioral Insights at NAR. “Buyers sought housing with more rooms, more square footage and more yard space, as they may have desired a home office or home gym,” she added. “They also shopped for larger homes because extra space would allow households to better accommodate older adult relatives or young adults that are now living within the residence. So many sellers were eager to get out of their old home and move to something bigger that would better meet their needs during quarantine.”
Due to a growing interest in having more space, as well as added privacy, buyers who purchased after March were likely to relocate to the suburbs and pay more for that home. On average, buyers who purchased before April spent $270,000 on a property. After April, that number increased to $339,400, on average. According to NAR, the longevity of homes may shrink for these purchasers, with post-April buyers likely to stay in their home for 10 years compared to the 15 years forecast for pre-April buyers.
COVID also impacted people’s sense of immediacy. NAR found that owners who sold in 2020 were more likely to say their need to sell was “at least somewhat urgent.” In addition, 18 percent of those who sold in April or later likely sold because their home was too small, compared to the 13 percent before April.
There was a demographics-related impact as well. The average buyer age is 55, found NAR—an all-time high. The average first-time buyer was 33 years old, and first-time buyers made up 31 percent of all buyers, down from 33 percent in 2019 and the lowest percentage since 1987. NAR also reported a slight rebound in single women buyers, from 17 percent to 18 percent YoY.
In terms of searching and the purchasing process, starting online has continued to grow in popularity. According to NAR, 97 percent of buyers searched for their home online—the highest percentage and up from last year’s 93 percent. On average, buyers looked at nine homes in person and an additional five homes via online virtual tour. Most buyers (88 percent) used an agent to purchase their home—a near-historical high. Ninety-one percent of buyers said they would “definitely” or “probably” use the same agent in the future.
“Some buyers purchased their homes before ever physically seeing them in person,” said Lautz. “They researched, viewed photos online and did virtual tours from their computers and phones, and ultimately made an offer through their agent.”
“REALTORS® did their part in not only keeping afloat America’s real estate industry, but also in helping sustain our nation’s economy as it faced unprecedented and unexpected challenges throughout the past year,” said NAR President Vince Malta, broker at Malta & Co., Inc., in San Francisco, Calif. “We are all in unknown territory with this pandemic, so it’s no surprise that more buyers than ever turned to agents to help them navigate through some of the uncertainties and one of the most complex, competitive markets any of us have ever seen.”
To read the entire report, click here.
For more information, please visit www.nar.realtor.Liz Dominguez is RISMedia’s senior online editor.