Ever since the COVID-19 pandemic arose in March of 2020, the real estate market has a seen more significant changes of trends and patterns than any other industry. With record low intereste rates and a high demand for suburban housing, the real estate market has never experienced anything like it.
Here’s 4 ways COVID-19 has changed the real estate market:
- Key component of the economy. With the affects of COVID, many companies and businesses suffered immensley in the heart of the pandemic, while real estate suddenly boomed. Rhode Island in particular, saw a signifcant increase of sales. One report states nearly 23% of Rhode Island sales were from out-of-state residents mainly from areas like New York and other urban cities. While many people in the real estate industry expected a drop in revenue and sales like many others, they experienced quite the opposite.
- Interest rates a historically low levels. According to an article by Forbes magazine, the average 30-year fixed rate mortgage rate dropped to a historic low 15 times in 2020. Also, In February, 30-year rates were averaging 2.81% from 3.5% the previous February. Most forecasts predict interest rates will stay around 3% for the rest of the year.
- Home equity is hitting record high levels. With the increase of prices, homeowners are experiencing more equity and bigger gains. By the end of 2020, home equity hit record levels with a national average of $7.3 trillion in tappable homeowner equity, according to Forbes magazine.
- Homeowners have new housing preferences. When the lockdowns of 2020 took place, many homeowner re-evaluated their way of living and housing style preferences. Having forced to adjust to a remote lifestyle, many people opted for homes with ample amount of space for the new work-from-home lifestyle. Big backyards was another feature in high demand and still remains. Over the past year and a half, single-family homes have been moving to more spacious locations such as the south, west and anywhere near the ocean, especially our very own Ocean State.
As we reside back to a more normal way of living, with vaccines available and businesses reopening, forecasts still predict the real estate market will be remain strong and the demand for suburban areas are expected to remain for at least the rest of 2021.