The coronavirus has severely impacted the real estate market. People have pinned their hopes on the development of a vaccine, and the expectation is that the vaccine will help life and the economy return to normal. Now that the vaccine is available, governments are doing what they can to get the maximum number of people vaccinated.
But will the vaccine give the real estate sector a much-needed boost? Will people who have been working from home for over a year get called back to their offices? And how will it impact the prices of property for sale?
We are certain that the real estate market will rebound once people start seeing that the risk of catching and/or dying from the virus is trending downward. The low number of apartment listings featured in 2020 reflected that people were uncomfortable listing their homes with the looming uncertainty of the pandemic.
We expect to see more property listings in the next few months. Now that vaccines are available, people will slowly start buying and selling again. Now is an especially good time to sell since more buyers are benefiting from low-interest rates.
Interest rates dropped to a historic low in the wake of COVID-19. Steps were taken to boost the real estate market, which remains one of the most impacted sectors during the pandemic. It’s quite possible that the trend will continue over the next 12 – 18 months. But these rates won’t remain low forever– once the economy begins to show signs of recovering, interest rates are likely to rise as well.
Before COVID-19, corporations boasted spacious office spaces that were deemed efficient and cost-effective. But in the wake of the pandemic, those same office spaces went dark when most businesses converted to remote work arrangements. Although several businesses have re-opened operations in their office spaces, most have yet to operate at 100% capacity. With that in mind, most business property managers are looking for workspaces that minimize their capital investment, are cheaper to lease, and have flexible lease terms.
As soon as the pandemic hit, businesses were forced to close down. This only fueled further uncertainty. This directly impacted the real estate market since people were not ready to sell, purchase, or rent homes.
According to experts, even vaccine development is not going to make real estate prices rise immediately. This is primarily due to the high number of already pending listings. As long as there are fewer buyers and more homes in the market, the prices will remain low.
The rental market will likely see the impacts of the vaccine first. As businesses reopen and more people get vaccinated, people are likely to return to their office buildings for work. The vaccine is likely to increase the demand for apartments and rental houses, the more square footage the better. The demand for property sales will increase soon thereafter.
According to experts, it may be another year or so for the market to fully recover. There will be a gradual shift over time, but there’s no prediction when the market will be back to its pre-virus status, even with the development of vaccines.
Having said all that, the real estate sector is likely to feel the brunt of the pandemic for an extended time still. Some of the changes that came about during the pandemic are here to stay, such as virtual tours and online property listings. We can safely assume that the vaccine has proven to be a ray of hope for people from all walks of life.