It's nearly been two years since the start of the coronavirus (COVID-19) pandemic. During this time, much has changed in the housing economy. Home and rental prices, as well as construction costs, have skyrocketed. Not to mention the housing inventory getting slimmer. Are you wondering how exactly the pandemic has been affecting the housing market in 2021? Read on to find out whether the global health crisis caused a blow in the world of property.
Early Phases of the Pandemic
Early last year, the economic panic was widespread. Many countries worldwide suffered from significant losses in their financial markets. This was because of the record low consumer behavior. You know how your own and everyone's sentiment was affected by the lockdown and stay-at-home restrictions. There were massive lay-offs, extensive furloughs, and retail business failures. On top of these, there were surging deaths and hospitalizations due to the spread of the virus. As expected, everyone prioritized having cash on hand and focused on maintaining their financial security. All of these led to colossal stock market sell-offs. They also resulted in a general drift of cautious pause. People wanted to see how the global health crisis would play out before spending money on hard assets like real estate.
The New Normal
For the last few months, there's been a positive trajectory in terms of economic growth as well as consumer spending. The hope of easing back to the life we once had pre-pandemic continues to improve. Thanks to vaccination efforts and re-opening measures, there's enthusiasm in pursuing the stock market. This led to the escalation of investments. These include the housing market, which mirrors the trend. The sudden interest in homebuying seems to continue to rise, and mortgage rates start to go down relatively.
Housing Market Today
Experts indicate that home prices hardly ever tumble. But it's worth noting that the numbers were flat roughly about this time last year. This is partly why you may notice large gains in home prices today than in 2020. Generally speaking, the housing market remains competitive. There may be a surge in new homebuyers. But there seem to be no corresponding new listings. If new listings somehow offer you a hopeful sign, you still face a challenging market.
An analysis found on the Board of Governors of the Federal Reserve System's portal suggests that the housing market has tightened. This is primarily due to the surge in demand. In fact, the cosmic wave has exceeded even the supply level before the pandemic. Similarly, the gap is too vast to be effectively filled by brand-new construction in the short term.
Many homebuyers are owner-occupants. This means that they're likely to sell their existing house upon buying a new one. So, it's rather surprising that there is a lack of gains for new listings. Nevertheless, the global health crisis has seen a boost in purchases of second homes. These would not generate new subsequent listings. Besides, in tight markets, homeowners tend to buy their next home before they put their current house on the market. These are just a couple of the contributing factors identified so far. Experts suggest that additional research is required to understand the trend better.
Are you looking to sell your home or buy a new one? Our experienced team at Texas Roadrunner Realty can help you make the most of your investment. Call our office today in San Antonio, Texas, to schedule your consultation.