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"People will be much more cautious about living in high-density areas with so many people nearby," predicts Lawrence Yun, chief economist at the National Association of Realtors.
This pandemic could push some people over the edge if they have anxiety about health issues and live in high rises with common amenities. People want to get out of the dense areas and make the transition from a condo in the city to a home in the suburbs.
It may be a few miles outside the city and won't have the nightlife, but it gets them out of the congestion. Activity has picked up among people looking to buy new properties with home offices, gym space and land. Couples with kids from the city are going stir-crazy, and are looking to expedite their move to the suburbs.
They've been forced to work from home at the same time as they home school their kids. This pandemic has made them obsessed with getting out here as soon as possible so they have outside space and a pool rather than being stuck inside their high rise building.
Mortgage rates continue to hover around all-time lows - with interest rates so incredibly low, if you were planning on buying right now there's no reason to wait if you find the house you like. In a falling-interest-rate environment, there's lots of incentive to move up, because sellers can afford more house at the same, or even lower, cost.
How much does a 1% difference in your mortgage rate matter? Basically, a lower interest rate means a lower overall cost of your investment.
For example, consider a mortgage loan for $400,000 with a fixed interest rate of 4.5 percent and 30-year terms. Over the life of your loan, you'll pay a total of $729,626 ($329,626 in interest). Monthly payments on this loan would be about $2,026.
If you get the same loan at 3.5 percent, the cost of your investment over 30 years will be $646,624 ($246,624.80 in interest). Monthly payments on this loan would be about $1,796.
Downtowns in many major and even smaller markets had enjoyed a revival in recent years. Younger generations like millennials were looking for more lively areas with access to restaurants and the ability to walk to work. Empty nesters sold large suburban houses to move to smaller dwellings, in or near cities, to enjoy amenities such as restaurants, museums and theater.
Life after the pandemic, however, could change that dynamic. Real estate agents say there has already been greater interest in the suburbs among people living in New York City, the epicenter of the pandemic in the United States, which may hint that more people could be seeking single-family homes in the near term.
Although the outbreak and social distancing measures have cooled the housing market for the time being, buyers, sellers and their agents have begun to change their behaviors to adapt to public health requirements.
People are becoming more comfortable with interacting through video conferencing, which could push more employers to allow their employees to work from home in the future, experts say. Another reason for increased demand for the suburbs because commute costs become less important when determining your residence.
The Accredited Buyer Representative (ABR®) designation is the benchmark of excellence in buyer representation.
Kelly Richmond is an Accredited Buyer Representative.
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