Emerging Trends in Real Estate: USA
After the troublesome year 2020, with many unforeseen events, the US economy is still recovering. Not only did the trade war with the Chinese Republic have an impact on the market development, but also the oncoming presidential election and of course the Corona pandemic. As times are unpredictable, many people seek security invested in housing.
But even though many people were hit by the recession and could not pay their mortgage, the demand for new housing still is far higher than the offer,
Read our small blog about what trends came up in the US and what will be important in the future.
Other than in the countries of Europe, the US American population continues to grow. In just 50 years, the population grew by 120 million and has now reached around 320 million. While the birth rate of Americans is somewhat around 1,76 and therefore below the reproductive level, the enormous growth is due to the undisputed attractiveness of the American Dream to migrants from all over the world. That results in a steady demand for new homes of all sorts and sizes, depending on the various groups coming to the country.
Changes Related to Corona
Apart from the immediate effects, the Covid-19 pandemic is expected to have some long-lasting impact on the market. This is mostly due to changes in behavior, which will live past the lockdown.
More Work from home – Fewer offices
Many people working in offices got used to the idea of working from home. That means, they will not want to go back to their office working places after – and if – everything went back to normal. So there will be less demand for office buildings in the future, especially for those located in the very city center for image reasons. Clerks will be happy not to spend hours in traffic jams anymore and prefer to sleep longer and spend time with their families. It depends on agreements between employees and companies about surveillance systems, project management, and the cost of office equipment, whether the whole concept will succeed.
Need for bigger homes which are suitable for home office
Last of all let’s have a look at those places, where many plans to be working from during the next few years. In the past, many people held a small apartment in a central area, worked in an office not too far away, and spent both work and leisure outside of the home. Restaurants, gyms bars and so far provided enough distraction that many saw their flat only for sleep and dressing. So they didn’t ask their home to be large or too cozy, as they hardly ever saw it. With the pandemic, they will suddenly need much more space, both to work effectively and to feel fine there. That means that the demand for larger homes will rise and many will even want to leave the city to have more space and more green around them; given that they find proper infrastructure and internet connection there.
Because the economy is unstable, many private and business investors hesitate to make any larger investments in anything that could be risky. That’s why the few who currently are investing prefer to acquire real estate over anything else. As a result, housing prices continued to rise even during the recession, as they seem to be the only stable option for many.
during the last couple of weeks. For example in August 2020, the number of housing sales was 24% higher than in August 2019 and 8% higher than in July 2020.
In an overall view, housing prices have risen around 45%t since summer 2012.
As an additional factor, the construction of new homes has mostly been put on hold during the pandemic. So with continuing immigration, people investing, families moving to the suburbs, and a lot of money still flowing around, it is expected that prices will continue to climb.