The global coronavirus pandemic, which inspired a national lockdown several weeks ago, is expected to continue having an impact on the economy long after it ceases to become a national threat.
The end of March was marked by plummeting consumer demand for home built houses, an after effect of the growing concerns over job security and the anticipated economic downturn. Now, the need for newly built homes is starting to pick up.
Home sales went down by 85% during the first month of the pandemic but have now seen a 20% growth. Although still down by 65%, John Burns Real Estate Consulting manager of research Devyn Bachman anticipates the growth to continue because most of the demand comes from a wave of first time homebuyers looking to escape urban living complexes.
Recovery in the Works
New home sales, which were down to 15 % during the first week of April, seem to be taking a turn for the better. As of the third week of the month, they had cruised back up to 35%, a figure that may be pushed up by young urban families with two incomes and secure employment over the next few weeks.
More People are searching for Homes
According to primary real estate listing site, Zillow, search traffic has increased in volume over the last week, despite the dramatic drop recorded during March and at the beginning of April. The market is yet to recover in terms of volume, but early indications show that more people are looking into newly built housing chiefly for reasons of health and sanitation.
Bachman suggests that more people want clean, safe, and new houses, and are especially inclined to buy homes that they can tour virtually on the internet. Agents that have adapted to the increasing demand for social distancing are thus far experiencing the most success selling houses.
Demand for New Homes Likely to Grow
The supply of newly-built homes is twice as abundant as it was pre-pandemic. This statistic defies the initial shortage the sector experienced as panic forced homeowners to withdraw their houses in fear of dipping property values. Builders are rushing to fill the deficit as more people look into relocating to less urban areas, chiefly to maintain a sense of safety and security during the ongoing pandemic.
As urban areas lose their appeal, the home building industry is expected to be one of the first to recover from the devastating initial impact of the virus. The surge of demand looks likely to grow over the next few weeks as more urban families look to shift to walkable neighborhoods away from the threat of densely populated regions.
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