A surprising thing happened in our area during the covid-19 pandemic.
The real estate market boomed.
Homes that had previously sat on the market for over a year were suddenly being snapped up in as little as a week, and at historically high prices.
Homes that would languish in a normal market were getting multiple offers and sellers were walking away with hundreds of thousands of dollars over asking.
And though it seemed like it may not be the best time to buy a new home during the pandemic, our area had more buyers than sellers in our area which drove up the prices significantly.
In fact, a huge fear was that the pandemic would result in a housing bust. Looking now at what the market has actually done, this forecast proved to be very wrong.
1) Working Remotely Created Demand For More Space
It almost seems counterintuitive that sales during a pandemic would be booming but the truth is, people still need homes. Kinda obvious, right?
There are always going to be people looking to buy homes – no matter what is going on in the market – because their situation dictates it. So despite the higher prices of homes, the pandemic has created a “new” set of buyers. These buyers are the people and families who decided that with everything going on, a “home” was now required to be not just a home, but also a workspace – and perhaps a space for school.
One of the things that changed because of the pandemic is that homes are not only being used as a refuge from the outside world, but things we normally would do outside the home like work and school are happening inside the home.
More people are working remotely and have had to create work from home spaces that were not needed prior to the pandemic.
Homeschooling’s Impact on The Housing Market
The same goes for schooling. Children who once would go to school during the day are not online learning and they are sharing the home space with their parents who are now too home during the day – families are needing more space because of this shift of being home.
This is even causing upticks in platforms like Outschool and Amphy which deliver online learning designed for kids at home.
The Sound of Silence
In addition to just looking at a home in terms of rooms, with more family members being home because of remote work gigs, canceled after-school activities or just more family-time, you should consider the potential noises in each space.
Doing a Zoom meeting for the company while the kids are screaming in the background can be challenging. Although there are tools like Zoom’s awesome background blur and Krisp (which uses AI to filter out ambient audio noise in the background) can be super-helpful.
If you work as a writer, for example, having the TV on in the same room may be distracting. You can also consider using BOSE Noise-Canceling Headphones to help keep you focused on the task at hand.
Because of pandemic restrictions, these families were now looking for more space and more functionality from their homes.
2) Doing Your Due Diligence
If you are one of those people who are looking to purchase a home, doing your due diligence is a must. How much will that extra space cost? How long do you intend to continue to work from home? What criteria is most important in a new space?
Of course, the first step is to see if buying a home is even feasible and this is where doing a few calculations is a must.
When we started thinking about a new space for our family, we started to plug in numbers using this mortgage calculator.
Taking a few minutes to know what you can afford is a great starting point and will help you take your next steps.
Another calculation would be to determine your amortization (so how many years you want to take to pay off your home). This calculator is very helpful in working through the specifics of a new mortgage and how you would like to structure it. Other considerations would be whether you would like a fixed rate or variable rate mortgage.)
3) Work with Professionals
It helps to work with professionals, especially in any field that can have a large impact on your finances. In real estate, this is often real estate agents and mortgage brokers, but also includes a qualified home inspector.
It’s worth knowing what you’re going to get before pulling the trigger on a big purchase and this is where working with qualified individuals stack the deck in your favour.
The expertise of those who are great at their craft can make your path to a new home much smoother.
The pandemic has had an impact on all of us.
One of the benefits of this is that it can help shake us out of our patterns and ruts and see a new path forward. For many, it has brought about changes in how we see our home, and how we value space and our quiet time.
One thing about land is they’re not making any more, so if you do need to find a better space for the foreseeable future see what’s available on the market, do your due diligence which includes prep work on the numbers using the handy tools above and be sure to work with professionals who can help you navigate the market during this time.