It is obvious by now that the coronavirus pandemic has forever changed the way we work, live, and invest in real estate. Our homes, outdoor spaces, rental properties, and offices have been affected by the virus. COVID-19 has also had an adverse effect on the economy, resulting in unprecedented levels of unemployment and impacting certain sectors of real estate. The question on many minds is ‘What will real estate in the post COVID world look like?’
Here are some of the trends to look out for in the post covid-19 real estate market:
#1. The Return of the Office Space
A few weeks after the pandemic had hit, Google and Twitter were some of the first companies to allow their employees to work from home. Many other companies all over the world have followed suit. Using collaboration tech tools like Microsoft Teams, Cisco, Jabber, Yammer, and Webex, teams that would ordinarily have to work from the same location can now work remotely, giving rise to the popularity of the home office during the pandemic.
However, Jamie LeFrak (Vice Chairman of the real estate investment firm, LeFrak) doesn’t think that the ‘death’ of the office space is permanent. Once a vaccine is found and COVID-19 is under control, many people will want to interact face-to-face with one another. He adds that companies are not even likely to make significant capital investments in reconfiguring their office spaces to accommodate social distancing in the future.
#2. The Rise of Multi-Purpose Homes
Although we may see the need for home offices diminish post COVID-19, there will still be a huge demand for homes that can serve more than one purpose. For example, people now prefer to work out at home since it is safer than going to a gym. As a result, many have invested a lot of money in home fitness equipment during this time and will likely continue to use it in the future. Therefore, home gyms will become increasingly common features in the post coronavirus world.
Homebuyers and renters will also look for properties that have recreational spaces like a fun room, liquor corners, or mini-bars in the post COVID-19 world. Such spaces allow residents to have fun indoors while minimizing contact with the outside world.
#3. Outdoor Expansion
Due to quarantine and stay-at-home orders, people have been spending a lot of time indoors. As a result, there is now a huge demand for homes with ample outdoor spaces. While most will return to enjoying activities outside the home after the coronavirus, this trend is likely to stick around as people have become accustomed to enjoying their time at home in a new way. And the fear of being cooped up again will likely stick around for a while, even after the vaccine.
So property buyers and renters will continue to want outdoor spaces with features like cabanas, pools, gazebos, and even a kitchen with a pizza oven. Such spaces allow residents to ‘escape’ and unwind without leaving their compound.
#4. Increased Demand for Second Homes
Due to social distancing guidelines, many people have not been able to travel to their favorite destinations in 2020. With the second wave of coronavirus raging, many are still avoiding public spaces like hotels and Airbnb rental properties. As a result, people that have never owned a second home are now considering it. Owning such an investment property means that one can travel to a destination and enjoy safe and private accommodation with family and friends.
However, once it’s safe to travel again and the fear of public spaces subsides, the demand for second homes will likely remain. Why? Well, the surge in travel that is likely to take place after a vaccine will lead to great profits for those who own Airbnb investment properties and other types of lodging. Many investors and property owners will want to get in on this and enjoy the high occupancy rates and rental income that are likely to come from owning a second home in a post COVID-19 market.
#5. Continued Migration to Suburban Real Estate Markets
There has been a slight increase in people moving from cities to the suburban real estate market since the onset of coronavirus. As people seek more space and solitude, the demand for homes in the suburbs will continue to grow post COVID-19. Jamie LeFrak says that the coronavirus pandemic is simply accelerating a trend that had already started. Many people in their 30s and 40s have been leaving cities for suburbs in recent years. In the long-term, many cities will experience a demographic shift to a much younger population. For investors, suburban areas may be the best places to invest in real estate going forward.
#6. Increased Use of Technology But a Return to Open Houses/In-Person Viewings
The post COVID-19 world will see a greater transition into the virtual and digital world. According to Peggy Olin of OneWorld Properties, real estate agents have had to get more creative with their marketing strategies in order to attract buyers during the pandemic. As a result, clients and agents alike have realized the convenience of video previews of listings, 3D virtual tours, virtual open houses, virtual home inspections, and the remote signing of documents during closings. Such technology is likely to remain a big part of the real estate business after COVID-19.
However, Billy Rose of the luxury brokerage The Agency says that though FaceTime and virtual tours have become popular, it is very difficult for buyers to get a real sense of a home without actually being there. How noisy are the surroundings? How high are the ceilings? How good is the lighting? To get answers to these questions, most buyers will insist on seeing the investment property before they close in a post COVID-19 world.
#7. Home Automation and Contactless Solutions
Coronavirus can live on surfaces such as sinks, faucets, doorknobs, tables, light switches, and handles for a few hours or days. Another problem area in commercial real estate and residential real estate is elevator buttons that are touched by dozens of people on a daily basis. Since such surfaces can be a potential and dangerous source of infections, the CDC has provided elaborate cleaning guidelines.
Post COVID-19, home automation and contactless solutions will be used to minimize interaction with such surfaces. From smart HVAC units, contactless elevators and door contact sensors, to automated lighting and speakers like Google Home and Alexa, contactless real estate technology will characterize the interior design and architecture industry.
As the pandemic rages on, you can expect more exciting real estate trends to emerge. Be sure to stay updated on the development in the housing market by watching the news and reading real estate blogs. The future belongs to those who will adapt best to post COVID-19 changes when buying an investment property or selling a house.