What Can We Expect from the Housing Market in 2020?
The recent pandemic has thrown a spanner into the works in all areas of life including paying mortgages and rent. Stay at home requests and social distancing rules have stopped home viewings and closed courts, meaning property deeds are no longer being processed.
While lots of people have chosen to put off their home sale or purchase and stay at home until the pandemic slows down, others are still buying property, signing new leases and selling their homes. But as personal financial concerns and economic uncertainty grows, experts have noticed changes ahead in the housing market, even after the pandemic has peaked, that will have an impact on renting, buying, selling and new constructions. These are some of the main change experts expect to see in the next few months:
Buying
At the beginning of the year, most economists believed home buying would remain strong throughout the year, increased by low mortgage rates, but held back by the possibility of a future recession.
When the pandemic first hit, the stock markets dropped dramatically. The widespread closure of schools and businesses and calls for people to stay at home led to mortgage rates being cut to offset the scare. On March 4th the fixed rate mortgage rate dropped to a historical low of 3.29%, which led to a huge amount of homeowners rushing to remortgage or apply for a new mortgage.
Unfortunately, these low rates haven’t stopped the home buying activity dropping dramatically. There aren’t many historical examples of how the market will react once this pandemic is over, but many believe that the interest will return quickly, although this depends on how long the virus lasts.
Selling
Many people have chosen to delay putting their homes on the market since the coronavirus outbreak because they don’t want to move home during a pandemic and they want to continue following the social distancing advice.
However, not everyone is able to wait. Thankfully, not everything is lost, although home viewing has decreased, estate agents are still showing people around homes virtually (by video tour) and homes are still being sold. In March we saw a 408% increase in the number of users making 3D video tours of their homes.
The challenge at the moment is to make sure that homes don’t stay on the market for too long. Estate agents try and price homes appropriately to stop this from happening. One popular option for homeowners who are looking to sell their property quickly is to sell to a cash home buyer. Cash home buyers like SFL Partners give homeowners an attractive alternative to the real estate model. They give sellers an all cash offer within 24 hours, which is perfect for anyone looking to sell their home quickly and during this crisis.
The outlook for sellers after the pandemic depends on how long the virus lasts for. We expect to see more homes go on the market when the pandemic slows down.
Renting
The pandemic is expected to hit renters, especially hard because they make up most of the workforce affected by business closures, layoffs and reduced hours.
We expect to see rents continue to rise during 2020 due to the increase in demand and reduction in first time-buyers purchasing properties. While affording rent might become an even bigger issue over the next few months, if unemployment remains as high as it is currently, landlords of low-cost apartments are expected to see a huge rise in demand from people who would otherwise rent high-quality properties or would have become homeowners themselves.
The coronavirus pandemic has caused a number of problems around the world. Many people have lost their jobs and can no longer afford their bills. This has led to a huge increase in demand for low cost housing and we expect to see this continuing throughout 2020. Buying and selling property is still continuing, but at a much slower rate. We hope to see an increase in this over the next few months.
