As COVID-19 vaccines roll out, real estate experts are considering their impact on the trajectory of the housing market.
“We’re going to settle somewhere in between where we were before COVID and where we were during COVID,” Danielle Hale, realtor.com®’s chief economist, recently said.
Many real estate forecasters are predicting that more inventory will arrive over the coming months as vaccine distribution gains momentum. Some would-be home sellers may be choosing to delay listing their homes due to the pandemic. (Read more: Sellers More Cautious as COVID-19 Cases Spike)
“As the risk of serious illness declines because more people are vaccinated, we expect to see more sellers,” Hale said. That could be welcome news for home buyers who are finding limited choices. Realtor.com® reported last week that housing inventories hit an all-time low in December as buyer demand continued to be elevated.
Robert Dietz, chief economist of the National Association of Home Builders, predicts that builders will construct as many as 1 million single-family homes and townhomes over the next year to help with tight inventories.
An increasing supply of housing could take pressure off prices. Home prices have posted annual double-digit gains over recent months.
Realtor.com® reports: “As the economy picks back up and people are no longer afraid to be within 6 feet of one another, they’ll get new jobs, promotions, and raises. That will give them the cash they need to become homeowners or trade up to a larger abode.”
Real estate experts say cities are likely to recapture losses in population. The pandemic has been blamed for an exodus from big cities to the suburbs, where space is more plentiful. In cities, “there’s a dramatic reset in affordability,” Jonathan Miller, a real estate appraiser based in New York City, told realtor.com®. “It’s starting to trigger interest from younger renters who were priced out and unable to enter the market.” (Read more: Exodus to the Suburbs Appears to Be Reversing)
Still, the suburbs remain a hot choice for homeowners looking for more space for less money. “Single-family homes in the suburbs will clearly be favored over the condominiums in downtown, city centers,” Lawrence Yun, chief economist of the National Association of REALTORS®, told realtor.com®. “People may seek out more distant suburbs.”