The Effects of COVID-19 on Real Estate...
Should I Stay or Should I Go?
I wanted to take a moment to reflect on just how drastic this pandemic has impacted how we live in & love our homes!
The terms "Shelter In Place" and "Social Distancing" weren't even in our lexicon. Our entire world was turned upside down and had immediate & drastic effects on how we live on a day to day basis.
Our shelters became our schools, our offices, our restaurants and our shopping malls (on the internet more than ever). For some of us, our homes became our sanctuaries while for others, our prisons. One thing is for certain, we have all had to use our homes in new and different ways. I feel this will change the way we live for both the short and long term.
In talking with my clients, colleagues and other professionals that make their living in real estate, I think there are quite a few questions that this pandemic has raised about how we use our homes and what shortfalls may need to be resolved through either renovations & expansions or completely purchasing a new home.
I think it will take some time to see how these ideas translate into the housing market, but I'd like to share a few initial categories that I believe will impact future sales and/or the renovation & architecture industry as well.
The importance of outdoor space!
If you can't go anywhere, then your only option is the land you own & the area where you live. I think this has several areas that might be relevant.
1. The value of a walkable community - I have heard from numerous friends & clients that they have come to truly appreciate their community even more now when they can get out and enjoy long walks and nature without having to get into their car.
2. The value of a connected community - The initial social isolation that was created by the stay-at-home orders developed into very creative ways to stay connected with friends & neighbors, including things like "Driveway Drinks", "Garden Gatherings", "Porch Parties" and other ways to remain connected while 6' apart!
3. The value of private space at home - This can be something as simple as a private patio or front/rear porch to enjoy the morning coffee or tea. It can be something more grand like outdoor kitchens, outdoor dining spaces and even pools.
4. Gardens, yards and other spaces - I have seen many more listings that are highlighting "Victory Gardens", greenhouses, chicken coops and other forms of sustainable elements related to the land. Whether simply for pleasure or to supplement an increased food budget, the ability to get one's fingers dirty is becoming even more important, and to some is true therapy.
5. Combine that with the lawn and space for kids, pets and others to play safely outdoors, the functionality of the land is becoming a much stronger selling feature.
The lack of suburban inventory is what has been driving the sheer volume of multiple bids as people snatch up houses in days, with sales often going for over the list price. If inventory remains tight, I suspect this will continue at least into 2021.
The importance of work space!
Having a Zoom meeting at the dining room table when the dogs & other "loud" household members break into your work calls isn't exactly professional! The fact that so many people are now working from home, there are several sides to this issue that I see as a driver to future housing needs.
1. A space to close the door FOR work - Privacy while working without distractions from family is not readily available in everyone's home. Extra bedrooms, basements and other spaces have provided short-term solutions.
2. A space to close the door FROM work - When the laptop is in the living room, one tends to work longer. One of my clients told me that they were so happy that their house had a dedicated office where they could close the door at the end of the day and STOP working.
3. Dedicated space for at home learning - Whether home schooling or simply a space to do homework, I believe that private learning spaces will become even more critical, even when the kids go back to school.
4. How do you manage multiple people needing work space? One of my clients had 5 adults living in their house during the pandemic. Three adult children all needing to attend their classes online and both parents working from home. It may not simply be just 1 office, but multiple spaces for multiple uses besides sleeping.
5. Finally, the need to have a properly networked house has become critical, from 5G cell service to high-speed WiFi to streaming entertainment services, we have all stressed the existing communications and cable networks!
I would not be surprised to see offices (more than one) showing up in more new construction or renovation projects.
It's always been about the Kitchen, now more than ever!
In our industry, we always say... "Kitchens and Bathrooms sell the house!" They tend to have the highest return on investment. A well designed kitchen has always been a critical element. Now that we've all been spending more time cooking, maybe your kitchen's not working as well as it could be. Functionality is one thing, and storage is even more important as folks have been purchasing more food and supplies than usual.
While the social connections we all enjoy in restaurants are finally starting to come back in the Green phase, I think that dining in, take-out meals and smaller social engagements at home will become more prevalent. How we entertain and with whom will become a tighter circle, I believe.
We have all experienced in various ways, the challenges of the food supply chain with shortages in products at the traditional food stores. One of my dear friends loves to bake and she told me about her problems finding yeast! Fortunately, I found plenty at the Swarthmore Coop and sent some to her. Locally, my neighbors and I have been purchasing fresh fish, meats and other stock items from Samuel's Seafood (a commercial food supplier to the restaurant industry, now offering home delivery) as an alternative to the local food stores and to support another local business. Stockpiling supplies was not something we used to be concerned about, yet now people are buying more products when they can get them, which brings up the issue of storage.
I suspect that kitchens will keep getting larger but also more functional. The walk-in pantry was always seen as a luxury and will likely become a necessity. Storage for bulk items (like toilet paper, remember the crazy hoarding in March?) and other staples stressed some people's limited space. Multiple refrigerators or the return of the stand-alone freezer is something else that I anticipate will help increase appliance sales.
Is "Open Concept" going to retreat to "Connected Concept"?
The huge trend towards 100% completely open spaces (living, dining & kitchen) provides for great communication between people in the house. It allows everyone to be able to entertain together & to see what's going on while working in the kitchen, etc.
The flip side of this "open floor plan" is that absolutely everything is always on display. That includes the toys, the messy kitchen, the dirty dishes and everything else!
Getting away from the family and the mess is something else that I've heard from a couple of my clients. Being able to find a quiet space to read, reflect & relax is not easy when everything is open to each other and everyone is home. While I do not anticipate that open-concept living will go away anytime soon, I do believe that "away space" will make its way back into interior design. Whether it's a "She-Shed" in the back yard (like the commercial) or the "Man-Cave" in the basement (or garage!), dedicated quiet space is becoming something that's even more important.
Urban Flight? Shorter or Longer Term Shift?
Where I think this may have an impact on real estate relates to a shift from urban living to suburban or country living. There has always been a strong demand for first or second time home buyers leaving an urban home to a suburban home. Now, the need for space and privacy is an even higher priority. The riots and the non-violent protests that shut down entire neighborhoods made it much harder for people living in the city.
I suspect there will be a short-term hit on the urban real estate markets. I've also seen an uptick of buyers from the New York region coming down into the Philadelphia region to purchase suburban & country properties.
What about Mom and Dad?
This is a very sensitive subject, but I do feel it is an important question to ask.
Many people lost a parent or grandparent to the Coronavirus. My heart goes out to everyone that has been directly and personally impacted by the loss of a loved one.
This may be too early to tell, but I do think that there may be a shift towards more multi-generational options in housing. The ability to find in-law suites in the current inventory of housing is quite rare and hard to find. Often it is a space or zoning limitation where there's simply not enough land to expand/build or the local authorities do not allow attached, independent living facilities on the same property.
Where I think this may evolve includes a few areas.
1. Moving Mom & Dad closer, but not in, your house - I think that there may be a shift towards finding solutions where the children will seek a "ranch" style property nearby to move the parents closer. This provides the independence wanted by the parents yet the comfort of future care if/when needed.
2. Aging in place - Often people leave their homes because it becomes too difficult to maintain or impractical from an access and mobility perspective. Whether older Sellers move to Condos, 55+ communities, assisted living facilities or smaller ranch houses, this has always been a major supply of inventory for the larger homes in the suburbs. I think more elderly owners may elect to defer their moves and modify their homes to stay longer. Not always an option, but ramps, chair lifts, elevators, accessible bathroom renovations and other options might see an increase to allow Owners to age in place rather than move into assisted living facilities.
3. Multiple master suites - Even if Mom & Dad don't move in with the children, I do believe that there will be a move towards providing "the option" to potentially have parents stay for extended periods of time, if not permanently, in the home. This will likely show up in new construction first, but the creation of 1st floor and 2nd floor master suites will likely increase. Without a 2nd kitchen, this also is a way to get around the zoning restrictions and provide ample space in a "single-family" neighborhood.
4. Will zoning laws change to allow for multi-generational housing? My guess is, likely not. So in order to obtain these multiple dwelling units, requests for zoning variances will likely increase.
What this pandemic has taught us is that we live differently today than we did before. Some aspects will return to "normal" while others may remain for an extended period of time.
So the question posted at the beginning of this section, should I stay or should I go?
Staying may involve changing your current house to serve your needs better. Whether that includes the use of an Architect, a General Contractor or just a simple Remodeler, I have the database of service contractors to help you "Stay Better" at home! Right now, with interest rates at near all-time lows, the ability to re-finance and possibly leverage your existing equity for renovations is a great way to fund improvements. I also have the contacts with lenders to help you with those options.
Of course, if the decision is to go, well.... you know that I would LOVE to be your Realtor!
Being a buyer in this market, right now, is difficult at best. Too many buyers and too few sellers has led to a feeding frenzy for the remaining inventory of houses. Often snatched up in days with multiple offers, younger buyers with tighter finances are finding themselves outbid time and time again.
While the interest rates are at all time lows, it's irrelevant if you can't "win" the purchase! Yes, it's a competition and you have to have the right partner to know how best to help you succeed.