Key Highlights
- Economists predicting more inventory
- Buyer demand expected to remain high
- Buyer and seller preferences reshuffle
New Surveys By Zillow Point to Changing and Permanent COVID Impacts on Housing Market
The housing market post-pandemic may look both the same and different than the housing market we’ve seen in 2020 and Q1 2021.
The Zillow Home Price Expectations (ZHPE) survey points to prices and to inventory. The Zillow Ideal Home Survey points to working styles and home preferences. Let’s take a look.
Will Inventory Increase as the Pandemic Lessens?
A majority (53%) of ZHPE participants are expecting inventories to rise in the second half of 2021 in line with pandemic health risks lessening and employment opportunities increasing.
According to Zillow economist Arpita Chakravorty, “As the pandemic subsides and the economy begins to recover, lowered health risks and renewed homeowner financial confidence should bring more sellers to the market…”
Samer Kuraishi, president and founder at The ONE Street Company in Washington DC, agrees. “It’s been tough on homeowners who want to sell but might have lost their job, or cannot work remotely. Increased employment stability will only raise confidence and push people off the sidelines.”
Home Prices to Continue Climbing
Strong competition among potential buyers pushed prices and appreciation up by more than +$20,000 in 2020. Even with expectations of increasing inventory in the second half of 2021, ZHPE panelists expect home prices to increase +6.2% in 2021.
Terry Loebs, founder of Pulsenomics, said, “…the panel’s five-year average annual home price forecast has never been more optimistic…the aggregate value of homes across the country will increase by another $2T in 2021…(while) affordability will likely remain a challenge…”
Continued Telework To Continue Boosting Demand
Economists overwhelmingly agree (95%) that remote working, at least part-time, is permanent. In Zillow’s Ideal Home Survey,survey participants said they are likely to relocate simply because remote working (at least one day a week) makes it possible for them to live anywhere they want.
Zillow economists are expecting 17.2% more home sales in 2021 than in 2020 spurred by telework.
Home Location and Size Preferences May Revert to Pre-Pandemic Norms
Survey respondents and experts alike were evenly split about Americans preferences to live in the suburbs over urban areas…46% to 46%. This same even split came up when asked about being closer to smaller cities or larger cities and living in larger homes or smaller homes.
Consumers in 2021, as in 2020 pre-pandemic, prefer to live in a 2,000 square foot home with three bedrooms and two bathrooms.
Buyers Want Digital Tools for their Home Shopping
For many pre- and during the pandemic, home surfing via digital tools became a favorite hobby for most everyone.
For those actuallysurfing as potential buyers, nearly 60% of Millennials would consider buying a home sight unseen if they viewed a virtual tour and nearly 40% said they would be comfortable buying a home online.
In Zillow’s Ideal Home Survey,79% of participants said they would like to view a virtual tour while home shopping; one in three participants said they would prefer taking a virtual tour instead of taking an in-person tour post-pandemic.
Room Preferences
Kitchens still rule, according to Zillow’s Ideal Home Survey.Depending upon the moving circumstances (preference or pandemic-inspired), 70% of survey respondents said a large kitchen was extremely/very important to them and 78% said a large kitchen was extremely/very important, respectivel
Other must-have room preferences included…
- 68% want a large ensuite bathroom
- 63% want a walk-in closet
- 62% want a patio or deck
More than interesting, home offices were not mentioned.
Thanks to Zillow and RealTrends.
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