Tuesday, 13 April 2021



How COVID-19 has impacted the real estate market,


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The real estate sector, a lagging indicator. In the last four years the real estate sector contracted by an average of -4.48%. The sector is facing both demand and supply challenges. On the demand side, challenges range from dwindling consumer disposable income and suboptimal mortgage services, among others.

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COVID-19's impact on the Real Estate Market

The COVID-19 crisis significantly impacted the residential real estate market this spring. Health concerns and stay-at-home orders led to fewer buyers looking for homes and fewer sellers willing to list their properties or allow strangers to enter their homes during a pandemic.

Despite the steep downturn during the early spring, home sales rebounded in the summer. At the same time, the health crisis generated an economic toll in the form of job losses and uncertainty.

Fears from the 2007-09 housing crisis linger in the minds of many, as some homeowners have struggled to make mortgage payments and the unemployment rate remains at historic highs. Because of the pandemic, many households are reconsidering their housing needs, as their homes have become substitutes for offices, schools, restaurants and recreation facilities.


Unfortunately, the real estate sector is among the significant losers of the current crisis. The impact of the pandemic on the real estate sector is unique in that it is not felt immediately by key stakeholders. The sector is a lagging indicator, which means that it can confirm long term trends but not predict them. The fragmentation of the sector means that different sub-sectors will feel the pinch of the virus differently than others. However, one common factor is that all sub-sectors will be negatively affected.


One of the big changes is the work-from-home policy. What started as a way to keep employees safe at home is now turning into the most popular work trend across the country, inspiring companies everywhere to step away from very large real estate construction projects and lease deals.


When office real estate is expensive and the country is facing an economic meltdown, and a work-from-home trend falls from the sky, it would be silly not to take it, right?

One benefit from dedicating to a complete remote workforce is that the talent pool would be much broader than what could be found within a certain geographic circumference around the office. Some corporations, like Facebook, are looking at this as an opportunity to adjust pay scales as well, another silver lining to the work-from-home situation for the companies.



Homeownership has always been part of Every Individuals. Because of that, many people accept owning a home as the right, even obligatory, thing to do without considering the benefits and the risks. If you are contemplating buying a home, you should know and review the pros and cons of the investment you are about to make—as you would any investment decision—before signing on the dotted line.



Real estate appreciates primarily because of the land on which the home sits, while the actual structure depreciates as time goes by. So the expression "location, location, location" is not just a real estate catch-phrase, but a very important consideration when buying a home. The neighborhood with the amenities it brings—school districts, parks, condition of roads, etc.—and the city where the home is located all factor into the property's appreciation.


One key factor to take note is WHEN THE INTEREST RATE HAS REDUCED TO OR IS 1%





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