How Has the Pandemic Changed Buyer and Seller Behavior?
CHICAGO – As the effects of the pandemic continue, nine in 10 Realtors® say their housing markets are in recovery mode, with many even saying their markets are hotter now than a year ago, according to recent member surveys from the National Association of Realtors.
“The delayed spring market is definitely occurring now in the summer months,” says Jessica Lautz, NAR’s vice president of demographics and behavioral insights. The housing market is seeing unprecedented monthly jumps in existing-home sales, and home price appreciation remains strong.
However, the pandemic has also changed some buyers’ and sellers’ behavior, and Lautz found seven notable changes culled from recent NAR research. She highlighted those findings at NAR’s “REvive! From Crisis” virtual conference:
- Buyers are in a rush. In 2019, buyers looked at an average of nine homes before making a home purchase. Now, they’re looking at three to four homes before initiating a contract. Homes are selling in an average of just 24 days, and more than a quarter of Realtors report greater urgency among buyers over recent weeks, particularly those making home purchases in rural areas.
- Wish lists shift. Home shoppers are changing some of their home-feature priorities, notably for home offices, according to NAR research, and many households want more than one. Homebuyers are also sizing up outdoor space and showing an increased desire for a pool or garden, or simply more space to enjoy the outdoors.
- Buyers less concerned about commutes. As remote work grows, 22% of about 2,300 Realtors surveyed by NAR say their buyers are less concerned about commute time when home shopping, and that freedom has allowed some to expand their searches beyond city centers to the suburbs and exurbs – which may also offer more affordable housing, according to one in four Realtors surveyed. “If workplaces keep changing and there’s this greater acceptance of remote working, this trend could stick around longer,” Lautz says. Also, second homes may be in greater demand. “If they can work from any place, we could see more buyers embrace second homes in rural areas,” Lautz says.
- An increase in multigenerational households. One in six Generation Xers and younger baby boomers purchased a multigenerational home pre-COVID. Lautz suggests that trend could increase as more generations, including aging parents and adult children, all come under the same roof during the pandemic.
“Moving forward, that could mean your buyers will be looking for larger single-family homes,” Lautz says. “They also may want to make sure they have a sizable living space on the first level” for an aging parent. Also, recent surveys show a growing desire of buyers – particularly younger buyers – who want to live closer to their family. The top reasons to move before the pandemic were a new job, marriage or baby. But now most moves are being driven by young millennials – twenty-somethings – who want to be near their family or friends. “The family unit appears to be becoming more important, and I think COVID could increase this trend,” Lautz says.
- Pets could drive purchase decisions. The pandemic sparked a surge in households that want a pet, and NAR surveys have found that pets can influence when and where people buy, with 43% of households willing to move to better accommodate their pet. “We see consumers actually want to buy a property because of a pet, and then they may want a fenced-in yard and extra space for their animals,” Lautz says.
- A wave of first-time buyers? Consumers may show more commitment to their home than long-term relationships. In the 1980s, 75% of first-time buyers were married. In 2019, that dropped to 53%. Young adults are waiting longer to get married. Meanwhile, unmarried couples are buying homes at the highest levels ever recorded by NAR: 17%.
NAR research has found a rise in roommates pooling their incomes to purchase a home together. It’s only 4% of purchases now, but Lautz says that’s the highest share NAR has ever recorded. In 2019, first-time buyers comprised 33% of the housing market, still a low number by historical standards.
“But there could be an uptick, particularly in affordable places further out,” Lautz says. “If young professionals become less tied to a metro area for work – in metros where it can be difficult to afford a property – they may increase their purchases.”
- Housing tenure could fall. Homeowners have been staying in the same home longer than they have in past – an average of 10 years – which is longer than the traditional six-year average, and Americans aren’t moving longer distances like they did in the 1980s. But since cities issued stay-at-home restrictions during the pandemic, consumers may start to question whether their current home fits their current needs.
“Interest rates are at all-time lows; [consumers] may want to move and find a home where they can work from and the kids can too, and they want more yard space to relax,” Lautz notes. “This change in homeowner tenure could be one we see coming soon.”
© 2020 National Association of Realtors® (NAR)