The novel Coronavirus pandemic rocked every industry in the world since its emergence, reshaping it in more ways than one. While countries’ health sectors and economies were adversely affected, the real estate market has emerged as one of the biggest beneficiaries of the reshuffle. The market is at its craziest in years as buyers try to outbid the competition, causing the value of properties to skyrocket. This is the story of Washington’s real estate boom and how the market has evolved since the pandemic.
The pandemic’s effect on Washington’s real estate
Over a year ago, with the pandemic in its infancy, home sales ground to a total halt. Nobody wanted to buy or sell a home due to the uncertainty that accompanied the Covid-19 pandemic and lockdown measures. Fast forward a few months, and Washington’s real estate market was booming, and home prices surged as the demand for housing surpassed the supply of properties in the area. It is apparent to any observer that the Coronavirus pandemic has changed our way of life, causing major alterations to our investment and home purchase habits.
Unlike when people had to go to work daily, the pandemic resulted in most people being confined to their homes. Personal space became a major asset. As people became unsure when they could get back into the world, they searched for more indoor and outdoor spaces and dedicated rooms for work. However, the high demand for housing came when supply was low as the home building industry slowly recovered from the Great Recession. When the pandemic came along, homeowners became unwilling to sell their property, which changed the whole scenery of the market. In May this year, research carried out in Seattle showed that house supply had dropped more than 46% from 2020 levels, officially making it a scarce commodity.
Already managing the effects of low supply and high demand, the real estate market was further influenced by record-low mortgage rates, which caused the prices of properties to skyrocket. By January 2021, CoreLogic reported that housing prices were up by more than 10% year on year. The value continues to rise rapidly, especially in markets like California and Washington.
Effect of Washington’s housing market trend on sellers
Although the substantial value gains have led many to classify the housing market as overvalued, this is good news for home sellers as properties keep selling like hot cake. Sellers are house-rich, having gained an average of $26,300 per homeowner in 2020, and the values can be expected to be higher in 2021. While this is one of the most competitive markets in history for buyers, it means more leverage and the chance to make more money for sellers.
The influence of the Covid-19 is evident in many areas, especially in the real estate market. With the pandemic and its effects expected to be around for a while, homeowners in Washington may be set to reap the good of the market for a while longer.