Housing Implications for the Future
The severity and length of the coronavirus pandemic has brought unprecedented changes to the U.S. economy and real estate markets.
With widespread shelter-in-place orders, Americans have been spending weeks after weeks working, studying, socializing and caring for family at home. With the re-opening of the economy scheduled to be cautious, the impact on consumer preferences will likely shift buying behavior.
As the results indicate, consumers are already looking for larger homes, bigger yards, access to the outdoors and more separation from neighbors. As we move into the recovery stage, these preferences will play an important role in the type of homes consumers will want to buy. They will also play a role in the coming discussions on zoning and urban planning. While higher density has been a hallmark of urban development over the past decade, the pandemic may lead to a re-thinking of space allocation.
The main challenge for the real estate markets over the short-to-medium term remains the shortage of available inventory. We started the year with under-construction of about 3.8 million new homes, compounding a steeply declining inventory of existing homes. During the last few weeks, we have experienced continued declines in the supply of homes as sellers are pulling homes off the market, and builders are suspending projects to protect employees. With the ranks of unemployed continuing to swell and financing contracting, even as mortgage rates remain low, we are looking at a challenging next few months. However, on the other side of this crisis, consumers will look at housing with a whole new set of eyes, bringing opportunities for the industry.
The results of Realtor.com's recent study were mostly similar across gender, with a few differences.
Both men and women valued a bigger house at the top of their lists. And they both wanted an updated kitchen in the next house. However, a larger share of men wanted more separation from neighbors, better insulation and soundproofing, and better technology in the home. In comparison, a larger percentage of women ranked more/better outdoor space as a desirable feature for a new home.
Renters and owners were on the same page about wanting a larger house for their next home. And both groups ranked an updated kitchen near the top. However, more renters than owners are looking for additional space from neighbors, along with more and better outdoors space. On the other side, homeowners are looking for better technology in their next homes.
The responses were close when analyzed by age group. Younger consumers (18-34) want more rooms in their next home than older ones, as well as better insulation and soundproofing. Reflecting higher concentrations in multifamily living, more young consumers also want more outdoor space. For consumers in the 35-54 age group, separation from neighbors, more bathrooms, and better technology ranked comparably higher. The 55+ age group was the most likely to be happy with current homes, while still valuing a bigger house, an updated kitchen and better technology in a new home.
Parenting status offered a few differences in consumer preferences. More parents ranked a bigger house, more outdoor space and an updated kitchen as the top features for their next home. They also indicated stronger preference for more rooms, bathrooms, and additional space from neighbors. For consumers without minor children, their current home was more likely to fit their needs.
Top Consumer Home Features During Coronavirus
Quiet neighborhoods, outdoor spaces and newer kitchens shine during coronavirus
Consumers value quiet neighborhoods, outdoor spaces and proximity to grocery stores during pandemic
Reflecting constraints of quarantines, consumers struggle with confinement, separation from family and friends, and elevated stress
More space, updated kitchens and home gyms top list of desired changes for current homes
Having more personal and family time ranks as top benefit of sheltering at home
Wish list for next homes: bigger houses, more outdoor spaces and updated kitchens
While at home, 32 percent of consumers are cleaning closets and garages, gardening, and painting walls
The United States has passed the one-month mark into the current coronavirus pandemic. The number of cases has surpassed 825,000, and Americans across most states remain confined in their homes.
During the first two weeks of April, realtor.com asked a nationally-representative sample of 1,300 consumers searching for a home how sheltering in-place has changed their preferences for the current living conditions, as well as for a potential next home. The insights reveal shifting preferences, predicated on prolonged home stays, remote work challenges, managing families and social networks, and technology.
The majority of respondents reflected the national housing composition, reporting a single-family home as their primary residence. Living conditions also reflected demographic splits, with younger consumers more likely to live in a multifamily condo or apartment. Also reflecting changing attitudes, more women reported living in single-family homes than men.
To see the rest of the study, including how or if people are actually tackling home improvement projects while quarantined, please visit realtor.com
If you are wondering how the pandemic might be impacting your property’s value, your neighborhood, or the Real Estate market in general, we are happy to provide more specific information.
