One area that has been a constant focus in hopes of it providing some indicators for economic forecasts throughout the COVID-19 pandemic is the real estate market. To help you better understand how things now operate in the new normal of the real estate market, let’s look at 4 ways Salt Lake home selling has changed in the wake of COVID-19.
Redefined Wants and Needs
As many of us started hunkering down at home and leaving typical office life in the rearview mirror, we quickly came to the realization that domestic and professional life colliding demanded a redesign of our home’s living spaces.
Overnight, home offices and kids’ playrooms became one and the same while kitchen tables became conference centers. Some of us had to rebalance working with kids at home due to daycare and school closures, and this meant reconfiguring or eliminating the separation between being an employee and being a parent.
Another big change we saw was the increased reliance on home kitchens and bigger food storage to accommodate large meals and buying groceries in bulk. The inability to know what was coming next week gave rise to panic buying as well as an increased level of preparation from homeowners wanting to create some order in a world providing a lot of chaos.
As time goes on, fully expect these aspects to exist as major considerations for many buyers.
Low Interest Rates
In the United States, the Federal Reserve found itself in a precarious position overseeing mitigation of one of the largest and most abrupt economic slowdowns in the nation’s history.
A method of delaying the pain brought by mass unemployment and an uncertain future was chopping interest rates to help stimulate the real estate market. This did have a positive effect, but we’re just now really starting to see the results that these low-interest rates have by providing buyers and owners the opportunity to get new loans or refinance with substantially lower monthly payments.
We aren’t sure how long these lowered interest rates will stick around, but they’re an absolute blessing for anyone looking to buy.
Greater Home Equity
Since so many homeowners were in a situation where home selling seemed either impossible or like a major health risk, many potential sellers stuck around in their existing living situations.
This change in plans meant continued mortgage payments, and then the rounds of stimulus checks allowed them to possibly make significant additional payments on those home loans.
The ultimate result of these circumstances is homeowners and sellers with more equity built, and this translates to the possibility of greater flexibility in negotiations.
Incredibly Low Inventory
The real estate market at the beginning of 2020 was looking pretty normal, and then a few months later almost everyone pulled their homes from the market hoping for better prospects later on.
With fewer homes available for purchase, buyers were stuck with either compromising and accepting the available options or sitting 2020 out and waiting to see how 2021 shaped up. With the market hitting its stride again, homes are there to buy but the demand is nearly doubled with the buyers from 2020 that waited now joining in.
This can easily result in bidding wars for homes of all shapes and sizes, and competition is certainly going to be fierce through the rest of the year.
Your Resource for Home Selling and Buying in Salt Lake
Between eviction moratoriums, skyrocketing home prices, and rising construction costs, 2020 and 2021 have been both stressful and exciting times for your local real estate market. If you’re planning to enter the home selling or buying process in 2021, contact us today at (801) 755-3865!